How to Write a Business Plan and What is a Business Plan

What is a business plan used for?
Writing a business plan is not just a necessary tool for business start up. A solid plan will lead your business on the path you wish it to follow. Good business planning will serve as a roadmap to the future of your business by allowing you to properly allocate resources, focus on key business points, and prepare for any opportunities or problems that may arise as you look ahead.

How to Write a Business Plan
While there are no strict rules for writing a business plan there are some guidelines that you can follow that will ensure your business possesses a professional and effective plan. The amount of information and level of detail included will depend on the intended audience. For external audiences such as investors, lenders and government agencies your plan will be much more detailed and in-depth. For internal audiences such as upper management or board of directors the information can be less detail oriented and more goal focused. In either case all information should be factual with evidentiary back-up.

To be effective, you should include the following sections and headings:

* Executive Summary: Sometimes the only information that potential investors read so it is essential to give a summary that highlights key aspects of the plan. Usually this section will cover no more than 2 pages.
* Description of the Business: Start-up plans, history and legal establishment of your business
* Operations: Include facility requirements and equipment as well as any outsourced operations.
* Management Team and Employees: Include information on key employees and managers including skills and salary. This section should also include recruitment strategies and salary forecasts.
* Product or Service: Include detailed descriptions of products and services, patents and customer base.
* Market Research: Include information on who your customers are and how to reach them. Also include information on market conditions, competitors and supply and demand issues.
* Strategy and Implementation: Include specific goals and dates as well as management responsibilities. Be very specific.
* Financial Plan: Include a balance sheet, profit and loss, cash flow, break-even analysis, assumptions, business ratios, and any other pertinent financial reports.

Style and Ease of Reading
Another important element in to focus on in addition to data and endless information is how well your business plan reads. Large paragraphs, endless statistics and financial jargon all can fatigue a reader. This can cause important information to be misunderstood or simply skipped over. Here are a few easy style tips to keep in mind when writing a business plan.

* Use bulleted lists
* Use headings
* Utilize the white space to break up the page
* Refrain from writing large blocks of text that fatigue the reader
* Use graphs, tables and other graphic media such as product photos

How to Write a Business Plan – The Fundamentals

Starting a business can be a tiring and sometimes confusing task. There are many things that are involved in someone starting their own company. The most important thing is to have a plan. Learning how to write a business plan can be extremely helpful. It can be used not only as a guideline when getting the company off the ground, but can be used to pitch the idea to anyone necessary, like a money lender or a potential investor.

The executive summary is one of the most important parts of the plan when presenting it to others. It introduces the entire plan and it is the first thing that people will read, so it needs to make a good impression. The executive summary should establish a product or business concept. It is a good idea to give a brief history about the type of industry and how to effectively use old methods, along with newly formed approaches. Briefly analyze the market and present a strategy. This summary should give an overview of both long and short term financial goals. Many people suggest trying to write this part last, after ironing out all the details.

There should be a section in the plan set aside to discuss objectives. Talk about the specific goals for the business, and be sure to use as much detail as possible. Talk about numbers and possible projections. An in-depth marketing strategy should be presented. This section is a good place to really promote the company. Convince the reader why it will be successful.

Anyone looking to be involved in a new company will want to know the marketing strategy before getting their feet wet. This is a synopsis of how products or services will be promoted for fulfilling customers’ needs. It should demonstrate a concrete knowledge of marketing and a solid, sensible plan. Discuss pricing policies and why they are good for customers. Understand how marketing is usually done in that particular product or service and decide how to structure the company’s specific marketing plan around it. Address the competition and their strategies and how to come out on top. Readers will want to know how the business will be introduced to the public, such as whether or not there will be a grand opening.

Operating procedures are an important part of a business plan. In this section, describe how the business will be run on both a long and short term basis, like day-to-day versus month-to-month. Explain how any government regulations will be met and how changes that affect the business will be dealt with. Detail what kind of requirements will be in place for employment and the type of training that will be received. Discuss how the geographic location of the company will factor into its success, along with the type of equipment that will be needed for the business.

When writing a plan for a new company, it is important to be optimistic, but realistic. This will show confidence and practicality. Knowing how to write a business plan can go a long way towards starting a company successfully. It is important to present a comprehensive and cohesive course of action.

How to Write a Business Plan for Small Business

Writing a business plan for small business is not that difficult. Implementing it and succeeding can be.

Take a step-by-step approach, that is the key in learning how to write a business plan for small business. That is what I am going to do here, and not just provide a business plan outline or template. A link to this is provided at the bottom of this post.

First, reflect carefully on your reasons for starting a business. Then investigate the benefits that experts say you get from business. Do your expectations and these benefits match? If not tread carefully.

Second, reflect on your passion, skills and talents. Does the business you intend starting match this?

Third, who will you help/ serve/ benefit?

Fourth, what do they need?

Do not go further unless you know exactly what the answers are and ideally discuss it with someone you trust. No, not your dog, someone who can talk back and ask difficult questions.

Lastly, write a simple step-by-step blueprint for how you will run this business, what goals you want to achieve. Do this in one sitting, and do it quickly.

Now you can reflect on how to write a business plan for small business, and you will realize that it is not matter of being following a recipe. It is one of getting your own motivation and thinking straight. Once you have thought through the questions above you can rewrite your business plan in more detail.

At this stage there is no shame in deciding that this is not for you and that you would rather work for someone. Most people do. Furthermore, in today’s economic climate, people may become desperate for an income. Starting your own business may seem the best solution. This could be true and have worked for many people, but without considering the questions above you may be kicking a hornet’s nest. Making a living is not a good enough reason for starting a business with all the hard work that goes with that. Be sure of what you really want, and if it is your own business, then commit to that.

This simple approach should help you focus on the important stuff and progress. Understand the big picture and then fill in the detail. Remember you are the pilot, not the maintenance crew, or the flight attendant, or the baggage handler. Stay focused on being the pilot of your business.