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 for a Small Business
So, you have an idea for a new business venture and you are excited. You can see the business in your mind but don’t really know how to begin to make it come to life. What you need is a plan, but how to write a business plan for a small business is the big question. The simple answer is to “paint” the picture you see in your head onto a business document so that others can see what you see. This business document becomes the black and white tangible way to share your vision with the business community.
It will consist of several components that will help to verbalize the purpose of your business, the goals of the business, and how you will conduct that business. It will need to discuss the current financial health of your organization, what financial resources you will require to be successful and how those resources will be utilized to produce that success. It will require you to demonstrate that you have conducted a market analysis that indicates your potential success and describe the marketing philosophy you will employ to realize that potential. All of these segments are the fine brush strokes, or details, of your broad picture.
The details provide the substance that is needed to bring the abstract idea into focus; however the vision is what makes it come alive. There are many technical templates that you can follow to physically put a business plan on paper, but the answer to how to write a business plan for a small business really is to simply paint a picture.
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Discover 7 Helpful Tips on How to Write a Business Plan
Have you learned how to write a business plan? If you haven’t, have no fear, because it is not that difficult. You may easily write a well constructed business plan, if you learn some useful advice in this area.
A business plan is an effective sales device, so you need to construct it very attractively and with clarity without creating misunderstanding in the minds of the investors.
1. The wording needs to be concise, plainly understood and simply stated. Try to focus primarily on key issues and don’t worry about unimportant details. It is as essential to understand what to exclude and as what to include. Hence, be sure to cover all vital points.
2. Clearly present the uniqueness of the article in question. Avoid trying to do very much, as it shows poor understanding what you can do best.
3. Write goals that are realistic, consistent, unambiguous, and are likely to be possible considering your industry.
4. Talk about your desired customers, how the desired market works, and how will you satisfy the needs and wants of your target clients well.
5. Make clear a thorough realization of your sponsor’s interest and needs.
6. It is not a good idea to overemphasize your passion for your product or letting others in on your means of productions.
7. Demonstrate how your team has a balance and record of positive outcomes to make use of the market opportunity in a way that will generate profit. In addition, demonstrate that your team has a lasting determination to stand with the proposal.
It is better, when you explicitly take on problems and risks and explain techniques to handle such situations. In addition, make sure that your business plan is complete and can be understood easily and has no need for any further information or explanation.
Lastly, approach your audiences sensibly. Remember that there may be homogeneous as well as heterogeneous audiences. Hence, ensure your proposal can attain the needs of diverse audiences.
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.
How to Write a Business Plan For a Small Business in 5 Simple Steps
Even if your business is not as enormous as the giant corporations, it doesn’t mean you should disregard writing a business plan. In fact, you should learn how to write a business plan for a small business. Why?
Because it gives you structure. It provides your company direction and goals. Without it, you’ll just be like a buoy floating on the water, without any real destination. How do you expect your business to grow successful then?
Learning how to write a business plan for a small business is quite easy. Below are your guidelines.
One of the first things you must consider is writing your company profile. What does your company do in the first place? How long has it been in existence? Who do you cater to? These things will give you a sense of what the company is all about and what it should look like to the customers. This will make sure that you stay on track.
Every business should have a mission-vision. It doesn’t matter how small or big your company is. A mission-vision also helps keep you on the right path. It reminds you of your business’ goals and aspirations. From here, you can already deduct just how long you plan your business to stay.
Your objectives will require you to come up with medium-term and long-term goals. When writing a business plan for a small business, this is the part that speaks of what your company is really here for. What does it hope to accomplish?
How will you achieve your goals and your objectives? How will you fulfill your mission-vision? That is what Strategy is here for.
Here you can write down just how you plan to make things happen. From time to time, you can check this part to see if your strategy is indeed working. If it doesn’t, then you can always change your strategy.
The summary is written at the end of the business plan. It highlights all the important parts and recaps the points that need to be emphasized.
While this part might be longer than the others, it’s also very important. If your customer doesn’t want to read through your whole business plan, they can always look up everything in the summary.
This is how to write a business plan for a small business. Make sure to include all of the above mentioned components to make sure your company stays organized. If your business plan is clear and organized, there’s a higher chance that your actual business will also thrive.