Tips for Writing a Successful Business Plan

One of the most often overlooked aspects of starting or operating a business is the value of having a quality business plan in place to guide you and to aid you in explaining your businesses vision. Writing one can be overwhelming, but there are some easy steps to take to make it a success.

Most people only look to preparing a business plan when they are looking for financing or hoping to draw investors to their business. This is arguably short sighted. Your business plan should be a living document that is reviewed and updated regularly. Shareholders, company directors, and employees all should be given an opportunity to read and comment on a regular basis in order for there to be no confusion as to exactly what path the venture is on and where on that path the company is.

With all of this in mind, here is a short list of tips to aid you in preparing a quality business plan.

Key Points

There are certain sections that every business plan should contain regardless of the business type or structure. By making sure that each part is succinct you will greatly aid yourself toward business success, they are:

• Executive Summary
• Company Overview
• Product and Service
• Market and Industry Analysis
• Marketing Plan
• Operations Plan
• Management Structure
• Competitive Advantage
• Financial Plan
• Funding
• Appendices

Executive Summary

This should be page 1 of your business plan. It is the most important single page of your entire document. The majority of people who read your business plan will never go beyond this page. Whether they are employees, shareholders, directors, bankers, or angel investors they should feel they know your company vision, inside and out after reading this single page.

Think of this as section as a combination of a sales letter and a full description of your company concepts. If you do not have a strong executive summary no one will ever see the rest of your plan. Remember that it is not actually written for executives nor is it truly a summary of your plan. It is your one and only chance to make people want to read the rest of your plan.

Company Overview

This section should be the easiest for you to write. Just be sure to include the following information.

• Company Name
• Ownership Structure
• Mission Statement
• Company History and Present State
• Future Objectives

Product or Service

Simply, what does your company do? Be factual but use an active voice to help in building excitement for your product or service. Write this section as if the reader has never seen or heard of a product or service like you provide.

Market and Industry Analysis

This is where you begin to illustrate you having done your due diligence. This section is not about you or your company, it is a dispassionate analysis of the current business state of the industry you are in or hope to enter, its opportunities and/or difficulties.

Marketing Plan

Next to the executive summery this is the make or break section. You must illustrate:

• There is a market
• You understand the target consumer
• You know how to reach that target
• Your pricing strategy is sound, with justification
• Your revenue model with 2-5 year projections
• Your sales strategy

Operations Plan

This is where you tell how you are going to deliver your product or service to the customer. It will include logistics, manufacturing, transportation, customer and technical service. Operations is normally about 80 percent of business expense so don’t skimp on details here. Shareholders, investors and banks want to understand that you understand this section.

Management Structure

This is where you let all interested parties know who will be running the business. Use key details from CVs to sell that you and your people know what you are doing. A strong management team is more important than an original idea. Investors, invest in people not businesses.

Create an organizational chart showing the company structure (if applicable) include everyone from CEO and board of directors down to key employees.

Competitive Advantage

What gives you the edge in your target market, from various key perspectives (e.g. pricing, skills, and quality). This is important especially if you are launching a product or service in an established market. In this case one of the keys to success of the new venture will be its ability to compete with what is already out there.

Financial Plan

This is where you show that you are going to make money. Use details to illustrate past, present, and projected cash flow. Providing a separate file, such as a spreadsheet, is a good idea. It allows investors, shareholders or other key financial stakeholders to play with the numbers and see how it affects the bottom line.

Funding

• Show what assets you already have and where you intend to add funds from
• Show how the funds will be used
• Justify your needs and show why the requested funding is appropriate

Appendices

Here you will organize all of the supporting documents and information that you have used in developing your business plan.