How to Write a Business Plan

Write a business plan to layout business ideas in writing. Writing a well-thought out business plan will divulge details that are often overlooked, even to you, until they are laid on paper.

When new business owners try to get funding for their new endeavor, they write a business plan. The business plan includes the road map that new owner envisions from conception to what the business will look like five years down the road. This business plan is presented to the bank or venture capitalists to secure funding.

Difficulty: Moderate

Instructions

1. ~Write an Executive Summary~
   
   Begin writing your business plan with an executive summary, which is basically what it sounds like--a summary of the key points contained in the business plan.
   
   There are two options to writing the executive summary. Either draft this summary to use as an outline for your business plan or write it later after you have all of the parts detailed in full.
   
   Waiting till after the business plan is complete will give you an overview and better understanding of what you hope to accomplish, so it may be advantageous to write it as the final portion even though it appears first in the final business plan.

2. ~Write the Table of Contents~
   
   The table of contents provides you and the readers of your business plan with a step-by-step display of what the business plan contains. The parts of a business plan that will appear in the table of contents may include:
   
   - Company Description
   - Products and Services
   - Market Analysis
   - Marketing Plan
   - Operations Plan
   - Financial Plan
   - Appendix

3. ~Write the Company Description~
   
   Come up with a name for your business and obtain the necessary business licenses and tax identification numbers. It is easier for a reader, even a banker, to visualize a business that is called Secret Garden Florist than XYZ. And when you have your licenses and tax ID numbers available to list in the business plan, it shows you are serious and ready to work.
   
   Describe the company in detail, including lease information if it's a retail store, location, traffic the business will be anticipated to get. Then describe yourself briefly as the owner of the business. Include information on partners as well. Provide employment and business background information to show you have knowledge to run the business.

4. ~Write the Products and Services Portion~
   
   Determine exactly what your business will offer, be it products or services or both. Write a business plan that includes a list, which is easier to read than lengthy verbiage throughout, of all of these products and services. Make it sound comprehensive and that you know the business you're getting into inside and out.
   
   Address any features you will offer that the competition does not provide. Your business will be considered to be an asset the community.

5. ~Write the Market Analysis~
   
   Write about why your new business will be viable in the market. Are there three other florists in the immediate area? If so, how will yours be different? What will you offer that the others don't.
   
   Conduct informal surveys of the potential customer base and include these data as part of the market analysis. Detail how you will mark up inventory and services to make a profit.
   
   Know what you're getting into and show it.

6. ~Write the Marketing Plan~
   
   List all of the ways you will market your new business. This can include paid advertising; business card, press release, and newsletter distribution; ongoing sales or giveaways; free classes; membership in local and national organizations to name a few.

7. ~Write the Operations Plan~
   
   Describe who will run the day to day operations. Explain when you will hire employees. List items needed to run the business such as computers, software, cash registers, credit card processing equipment and plans, inventory, and supplies.

8. ~Write the Financial Plan~
   
   This is the meat of the business plan. This is what the banker may thumb to first to see what you have envisioned. Don't let it intimidate you.
   
   Basically the financial plan is your best guess of what your new business will earn in a given amount of time, say annually or per month. This type of information can be researched somewhat, but many people are not comfortable sharing money information so be prepared to make a WG (wild guess).
   
   Don't fret over it but aim high. Show that you have faith in yourself as a business owner.

9. ~Include the Appendix~
   
   Use the appendix for supporting documents you may have referred to in the business plan such as copies of tax ID numbers, business licenses, and so on.

10. ~Write a Cover Letter~
    
    If you'll be presenting your business plan to a bank or other investor, write a cover letter to introduce yourself and your business idea. Write the cover letter last. At that point, you will know your business plan and what you hope to accomplish with your new business much better than before you starting writing the business plan.

Tips & Warnings

• Refer to your business plan while running your business to stay on track and to bolster your convictions when things get tough.

[leduncan]

on 7/8/2009 Very good article. Very detailed. I would recommend writing the Executive Summary and the Table of Contents last.