Although many people would probably like to skip this step, writing a business plan is one of the first tasks any entrepreneur should undertake. Having the method behind the idea written down on paper will prove crucial as you move forward with the process. A solid business plan can be used in three ways: it lays out your company goals and your plan to achieve them, it ensures everyone involved is on the same page and it can be used to persuade investors to fund your ideas. So, now that you are ready to write a business plan, how should you tackle it? Here are some steps to guide you along the way.
Set up Your Outline
Creating an outline is the best way to set yourself up for plan-writing success. Having all the necessary elements accounted for in a logical fashion will not only give yourself a starting point, it will make it easier to stay on track. Plus, an outline allows you to break the overwhelming task of writing the complete plan down into smaller bits. Here are the main sections you will need:
- A cover sheet and table of contents
- Executive summary
- Business overview
- Financial information
- Marketing plan
The Importance of the Executive Summary
The executive summary is the first thing an outsider will read. Whether that person is an investor, a lender at a bank or a partner, he or she will be looking for solid information that’s well substantiated and clearly stated. If your business idea doesn’t absolutely shine in the executive summary, there’s a chance that readers will not continue into the other sections. Be sure that your grammar, spelling and punctuation are flawless, and write in short, concise sentences. These factors will indicate a professionalism and sophistication that will appeal to investors. You can consider the executive summary to be similar to making a first impression.
Main Body Sections
The most significant parts of the document’s main body will be an overview of the business, a look at competitors already in the field, an analysis of the market and details about how the company ideally would run. A forecast for the number of employees the business might need to hire is a good idea as well. Investors will want to see that you are familiar with your competition and how you plan to grab your share of the marketplace. Your marketing strategy will play a role in gaining market share, so don’t forget to include some details about reaching ideal clients and a plan for customer service.
Of course, money is always a key factor. Particularly if you plan to seek funds from banks or investors, the financial picture is a vital addition to your business plan. You should have a list of equipment that will be needed and how much that will cost. Plan to add a breakeven analysis and a projected profit-and-loss statement as well. People with money to invest want to know what your financial picture is today and what you expect it to look like at least three years in the future.
This back section is where you will place all your supporting documents. These might be loan applications, licenses, market analysis documents, information specifically about the products, an asset acquisition calendar and even a chart that shows the projected organizational structure. You might even be able to create a contingency plan that addresses risk factors, changes in industry trends or a survival plan for potential slumps.
As you’ve seen, a business plan is a necessary tool in the world of company startups. Just as you wouldn’t start on a road trip without a map to help you get where you want to go, you wouldn’t want to begin a journey with a new venture without the set of directions known as a business plan.
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