Writing Up a Business Plan
All businesses start with an idea. Writing a business plan is the process of translating your idea into words, pictures and charts that will convey your idea to lenders, advisers, and even to yourself. This stage is critical for catching errors or gaps in your planning, so don't skip it!
-
Elements of a Business Plan
-
Your business plan should describe each piece of your business and how you will accomplish the tasks associated with it. You'll need to include at least the following elements:
Company description: Basic information such as the location, owner's name, state in which the business is registered or incorporated, and what industry the business is in. If you have advisers, an attorney or an accountant, list them here.
Product or service: Describe what you're selling and to whom. If your business involves products, include photos. If it involves a process, such as selling custom clothing over eBay, include a flowchart that makes the process clear. Be detailed. Describe your suppliers and your distribution strategy. Gather as much data as you can on your customers, and exactly why they will buy your product or service.
Business environment: This section describes the state of your industry. List your competitors and explain why your business is different. Mention any government regulations or special taxes that you may be exposed to.
Marketing strategy: How will you let your customers know that your product exists? How will you capture their feedback so you can continuously improve your product once you're in business? This section specifies not only the type of advertising you'll use, but also its cost and basic message, and how you'll get information about what your customers want.
Financials: This section describes, in as much detail as possible, what the probable costs, revenues and profits are. If your business hasn't started yet these will necessarily be educated guesses, but research competitors to create good estimates. Use charts and diagrams. This section is often the shortest, but takes the most time to compile.
Remember Your Audience
-
You may choose to add other sections, or to spend most of your time on one or two sections, depending upon the audience for your business plan. If you intend to use it to secure a loan or investment, spend a great deal of time on the Financials and Business Environment sections. If you're writing it for yourself as a tool to wrap your head around your plan, spend the most time on the sections you know least about and are least inclined to write about. These will generally be the sections that you will need help with once you're a business owner.
Write concisely, but write as much as you need in order to fully describe what you're doing. A business plan may be anywhere from five to 500 pages, depending upon the complexity of the business and the amount of research data you need in order to back up your idea and sell it to investors or lenders.
-
