Business Plan Writing for Dummies | How to Write a Business Plan
Even if a business is small, it still needs a written business plans that focuses on the essentials regarding organization structure, products and services offered, marketing strategy, sales strategy and a clear description of the enterprise financial strategy. Prospective investors, banks and other creditors will evaluate your plan before providing you a single penny. Its not personal, its business. money. If that sounds intimidating, don’t panic. There are many resources at your disposal to guide you through the process, including 9 basic steps towards formulating your plan in a cogent and cohesive manner.
While the following 9 Basic Steps on How to Write a Business Plan are elementary for most business executives and entrepreneurs, the fact is many seemingly smart entrepreneurs neglect to go through the exercise of putting their plans on paper and revising those plans on a regular basis. After all, business dynamics are always subject to change beyond the control of the business operator and plans always need to be revised accordingly. Worse still, most entrepreneurs fail to follow best practices when it comes to business plan preparation. This explains why the team at Prospectus.com has been relied upon by a broad spectrum of seasoned business professionals and startup entrepreneurs from across nearly every industry to put their thoughts, visions and forecasts into a framework that keeps them focused while they are busy operating their businesses.
- Create an outline: We recommend some or all of the following sections:
- Cover page
- Executive summary
- Company description
- Market research
- Products and services
- Marketing/sales plan
- Financial projections
2. Template/tool: You can use any number of off-the-shelf templates and tools to help organize your information into the outlined format. Keep in mind, the rubber meets the road when you realize that you get what you pay for when depending on a ubiquitous template.
- Describe the business: Begin writing the plan by describing your business, including the company name. What markets do you serve, and how do you products/service serve these markets? What features will make your offerings competitive? How will your clients and customers find out about your offerings? Will your organization be able to function as effectively as your competitors?
- Market analysis: Identify who needs your offerings (i.e., identify demand), and/or figure out whether you need to create the perception that your offerings should be purchased (i.e., create demand). Describe the market dimensions, including geographic and demographic. Describe the logic behind your estimate of market share you can capture.
- Describe your product/service line: What will you offer and how will you produce it?
- Develop marketing plan AND a sales plan: Describe your marketing strategy, including advertising and promotion, pricing, and where to buy. How will you make potential customers aware of the superior aspects of your offering aka What is Your Value Prosposition? Your sales plan describes how you’ll execute your market strategy, include staffing and selling locations – online, retail location, from home, at home parties, etc.
- Create financial projections: If you are a pre-revenue startup, your financial statements, also referred to as your pro forma, are probably pretty bare before you launch. However, you should create financial projections that show where you think you’ll be in one year. This will include a balance sheet, income statement, and cash-flow statement. Will you have enough revenues to pay your bills and employees? Will you earn enough to at least break even? How long before you start earning a profit?
- Registering your business: For startups, you need to formalize the organization within the jurisdiction that you will be headquartered and, if applicable, you will need to conform with state and or federal rules to receive all your licenses and permits. You’ll need to choose whether you’ll be a sole proprietorship, partnership, limited liability company, a C corporation or an S corporation. Consult with a legal advisor before deciding.
- Management structure: Unless you are a one-person company, describe the duties of your employees, contractors, managers, partners, and the reporting structure among them.
You can fill out the remainder of the business plan using the information already developed. A good plan will go a long way toward obtaining capital from private investors in form of equity or debt and obtaining loans from credit providers such as local banks.
Above is intended for use as a guidepost only, it is not a bible. Remember to make changes to your business plan as necessary. For those who “just don’t have the bandwidth” to prepare a business plan in accordance with true best practices, contact us today. The investment you make in preparing a proper business plan is likely the most important investment you will make.
How to Write a Business Plan | Business Plan Writing for Dummies