How to Write a Business Plan
Business plan is a guiding map in order to implement your strategy to taste the success. Sadly, many of us don’t know How to Write a Business Plan and consider it very intimidating and complex task. So, let’s find out how easy it actually is…
Are you thinking of starting a new business? Then you must have come across the term ‘Business Plan’. Chalking out the business plan remains the most important task to achieve the success in the proposed business.
Business Plan
Business planning is about writing a certain result oriented organized and methodical script. You are required to design your plan to obtain your purpose. It is a plan which considers the available resources, identifies the opportunities and problems and manages those resources to get the optimum growth and success. Business plan is not the thing required only for starting business or for getting loans as perceived by most of the people, but it also helps to find out the shortcomings and run the business smoothly.
Although, business plans vary from each other depending on the nature, products and local factors, the general outline is same that includes the main components like Executive Summary, Description of Company, Description of Products or the Services offered, Market Analysis, forecasts and future planning, Business Strategy and its Implementation, information regarding Management staff and sustainable Financial Plan.
Here, you must ensure that your plan should revolve around sound cash flow strategy and its strict implementation before writing down your business plan. You should not mix up profits with cash. Again implementation of your strategy plays a vital role in success of any business. Assigning of the responsibilities in certain time frame and following up those plans can bring in desired results.
Need of Business plan
Business plan is like a road map. Here, you set your targets, identify the areas on which greater stress to be laid on, chalk out the measures to be taken and provide the business the ultimate cash flow and growth.
If you are intended to seek loans to fund your business then most of the financial institutions will ask you for a sound, feasible business plan. As, business plan is a clear refection of your future activities, it plays a very important role in getting you loans.
If you’re seeking investments in business then you require a business plan investment. The potential investors invest in the ideas, the people, their history, the technology the entrepreneur is using, the market analysis, and other local factors. The business plan serves the purpose to define the ideas and all these related factors and explain the concept of business to investors. While working with your partners you require such business plan to define agreements between partners and convey the future vision.
Perhaps, the most important need of business plan is for running the business smoothly. It also serves as one of the most useful tool for communication with your management team. While the daily routine business activities can be quite distracting full of surfacing problems, their solutions, opportunities and commitments, it helps in keeping the business on the right track by reminding our short term and long term goals. A business plan is required to sell a business, or to set a value on a business for tax.
It is high time to realize that this plan is not meant just for start-ups, loans, or investment. Moreover, the business plans are much easier to develop. You simply plan the steps and stages, identify and distinguish preferences, check out for the resources and try to reallocate them to get maximum output and manage the cash flow.
Before writing down a plan, let’s understand what the good plan is.
Good Plan
1. Try to keep your business plan simple, specific, realistic and complete to implement in much effective way to achieve your targets. While, simplicity enhances the communication process, specific writing can help you to lay stress on particular areas. Realistic approach can result in better success rate and it should conclude all necessary components.
2. The value of any good plan is measured by its contents and not by its length. A sound plan is broken up into meaningful paragraphs using readable bullet points, supported by useful illustrations of products, and business charts and graphs to illustrate important projections.
3. A good business plan sets the concrete goals, assigns tasks to different departments and sets milestones and deadlines for tracking implementation. Normally for every one part of strategy, ten parts of implementation should be there.
4. A good plan regularly reviews its position and alterations are made regularly to meet the changing demands of the business. It should be always practical.
Types of Business Plans
According to the specific situation and personal need, these plans are known as start up plans (the most common type of business plans), investment plans (designed to attract investment), internal plans or operational plan (as a guiding tool in the course of business for your management team), Growth plan (designed to show your future expansion) etc.
How to write A Standard Business Plan
There are conventional components of a standard business plan. Although the order doesn’t carry any great importance, conclusion of these main constituents can make your business plan appealing and acceptable.
1. Executive Summary – It is the concise summary of your business and though it appears at the top. Try to write it at last when you finished scribing other topics. It’s just a page or two of highlights.
2. Company Description – This contains the detailed pen picture of Legal establishment, history; start-up plans the information about your staff etc.
3. Product or Service – It is the description of the product you are selling. You should lay stress on the customer benefits.
4. Market Analysis – Description about your market trends, the needs of market, your target sector of market, the location of such targeted area, how to reach them, etc. All you have to do is to conduct a comprehensive market survey to conclude the analysis.
5. Strategy and Implementation – Be specific. Include management responsibilities with deadlines and specific budgets. You have to make sure that all these activities carrying out tasks are tracked regularly for results.
6. Web Plan Summary – For e-commerce, include discussion of website, development costs, operations, sales and marketing strategies.
7. Management Team – Describe the organization and the key management team members.
8. Financial Analysis – Make sure to include at the very least your sales forecast, projected Profit and Loss statement, projected business ratios and Cash Flow tables. It is highly recommended to use bar charts and pie charts to illustrate the numbers.
It is quite easy to write a business plan based on these guidelines. Remember, a good Business plan can make all the difference!
By Jayashree Pakhare
Published: 4/8/2007
Detailed guide to writing an executive summary, description of opportunity, sales and marketing strategy, team and personnel, financial forecasts, operations plan.
Why You Need To Write A Business Plan
The business plan is the blueprint for your business. You wouldn’t walk over to an empty lot and just start nailing boards together if you wanted to build a house.
How to Write a Good Business Plan
The business plan or the feasibility study of a business is the key to your banker’s wallet. If you plan to borrow money to start your business, it would be wise to write down your business plan first.
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