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How To Write A Business Plan

A business plan is an entrepreneur’s key to success.  It is a tool for measuring the progress of your business, attracting capital, and making strategic alliances.  It is a detailed outline of business operations, products and services, management, cash flow, marketing strategy, and more.  A business plan has four major parts:

·         Description of the business

·         Marketing

·         Management 

·         Finances

Services & Pricing

Organize your plan with a table of contents that has logically arranged sections, and appendices, but keep it simple.   There is no single formula for developing a business plan however the following elements are common to all business plans. 

Executive Summary:   This summary begins your plan and is the single most important part.  Many prospective investors will not read past this point so it must summarize everything in the plan in a very compelling way.   It should be a maximum of two pages.  Include your business objectives, mission, and your keys to success.  Make it professional, enthusiastic, complete, and concise.

Company Description: This is where you describe your business, what you do or sell, the company ownership, legal entity, facilities and assets. Include information about your business location and area demographics as well as current and future space requirements.  Detail your start up plans (new companies) or company history (ongoing companies) and the key factors that set you apart from the rest.  

Products and Services:  Describe your principal services, markets, and products focusing on customer benefits.  Describe how your product or service is unique, how it appeals to customers, and how it compares to others on the market. 

Market and Industry Analysis:  This is a very critical element of your business plan.  Describe your target market, your customers’ needs, demographics, and how you plan to reach them. Indicate whether the market is growing, steady, or is shrinking.   Provide details about your competitors, their strengths, weaknesses, estimated market share, and their advertising strategy.  Tell how your product or service is different from theirs.  Describe your sales potential include information about your pricing strategy and sales appeal and forecast developing trends in your market over the next three to five years. 

Strategies and Implementation:  Describe your business operations, what operating advantages do you have?  Be specific, include sourcing and fulfillment, management responsibilities with dates, and budgets with methods to track results.   Describe your current technology and any recent acquisitions that may affect how you do business.  Highlight current and potential problems and demonstrate how they will be overcome.  Detail your marketing strategy, how will you promote the business?  Describe your advertising plan, include positioning statements, pricing strategy, promotion strategy, distribution patterns, marketing programs, sales strategy, and strategic alliances.

Web Plan Summary: Every credible business needs an online presence so include plans for conducting business online.  Detail website, development costs, operations, sales and marketing strategies.

Management: Describe the organizational structure and the key management personnel of your business.   Detail the backgrounds and qualifications of board members and key executives.  What are their skills and experiences that relate to the success of your business?   It is important to demonstrate that you have an effective management team that has the business skills necessary to successfully manage the company.  If there are skill gaps at the management level tell how you plan to attract the needed personnel.  Include a personnel plan and organizational charts. 

Financial Analysis:  Develop a financial plan that includes a capital equipment list, a balance sheet, income statements for three years, or pro-forma income projections, cash flow analysis, break-even analysis, profit and loss statements, sales forecasts, start-up expenses, and funding needs. Describe your key financial indicators.  State the assumptions that have been made and tell why your assumptions are good.

Appendices:  Include the following supporting documents

Presentation is important!  Invest time and money in the finished appearance of your business plan. Use a nice text layout and effective headlines to make the document look more professional.  Include bar charts and pie charts to illustrate the numbers.  Add color images and accent color to make the final product more appealing.  Be sure to proofread everything!   Use top grade presentation paper and print your business plan on a good quality laser or color printer.  Bind the copies in attractive covers.  

Your business plan is a living document that requires constant attention. Periodically compare actual vs. planned results and revise as circumstances change and business knowledge grows.  Use your plan to manage the business and achieve success.   With a polished, professional business plan you’re prepared to get the backing you need to achieve your goals.

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