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