How to Write a Business Plan Well?
If you’ve never written a business plan before, this article is exactly what you’re looking for.
If you’ve written one (or many) before, let this be helpful reminder & refresher course on the essential elements of a good business plan.
Introduction to Writing a Business Plan
Writing a business plan is a critical part of launching any new business, venture or startup. In fact, it’s often the first thing you’ll do, once it’s time to start taking your idea seriously.
A detailed & convincing business plan can help capture investment capital. It can also help you connect with new partners, clients or money-lenders.
Being familiar with the process of writing a business plan is not only important, it’s also critical to having success.
Not to mention it’s an excellent way to organize your thoughts & put on paper what you expect the business to become.
The Art of Writing a Business Plan
Whether the business started yesterday, or you’ve been in the business for decades, taking the time to research, plan & write a strong business plan can pay dividends.
The simple process of writing the plan, be it for the first or umpteenth time, can help you evaluate the business strategy, refine the plan & reorganize if necessary.
Understanding the challenges, expenses & operations of the organization will assist you as the business expands.
What are the Elements of a Business Plan?
There are several key elements to any business plan. They are:
- Title Page
- Table of Contents
- Executive Summary
- Company Description
- Products / Services
- Marketing Plan
- Operational Plan
- Management / Organization
- Financial Plan
How to Write a Business Plan?
The list above represents the key elements of any good business plan. But let’s take it a step further & provide specific details about how to write each section.
Title Page & Table of Contents
These sections are relatively self-explanatory. If you’re having trouble writing either of these, I suggest reconsidering going into business altogether – it will only get more difficult.
“If you can’t’ explain it simply , you don’t understand it well enough.” ~ Albert Einstein
Think of the Executive Summary as your Elevator Pitch.
If you’re not familiar with the term ‘Elevator Pitch,’ it’s what you would say to someone else if you attempted to explain & pitch your business to someone in the time it takes you both to ride in an elevator.
In short, an Elevator Pitch is a brief, yet descriptive, explanation of the business & its benefits.
Writing (& rewriting) the Executive Summary is an excellent way to refine & improve your pitch.
Even if you’ve been managing the business for years, coming back to your Executive Summary, from time-to-time, can be a helpful exercise.
Pro Tip: In today’s world of brevity, snippets & instant messages, consider limiting the Executive Summary to 140 characters or less (as long as nothing is lost by doing so).
This will give you the opportunity to use the Executive Summary / Elevator Pitch on social media, websites, business cards & page descriptions.
Describe the business – clearly, concisely & effectively.
Pretend you’re describing the business to someone completely unfamiliar with the organization (because chances are they will be). Write for that person & help them understand.
Be sure to avoid superfluous details. This section is best used for vital information about the business. Think of it as an elaborated form of the Elevator Pitch.
Products / Services
What does the business sell?
Does it sell products, services or something else?
Explain what separates the business from competitors, through the products/services being sold.
Provide details about how & where the products/services are manufactured, offered or accessible to customers.
A business if often defined by the products/services it provides, so be sure to be specific about the entire process. It’s important to provide complete details about how the business will make money. Not doing so will hurt the company’s potential for success, investment or interest.
What’s the company’s unique selling proposition?
How will customers learn about the business?
What is the brand?
How will awareness be raised?
Where will potential consumers see, hear or learn about the products or services?
A marketing plan details how the brand will be promoted, & explains the channels or platforms that will be leveraged to raise awareness & generate sales.
Will the business utilize social media or email marketing? Will brochures & collateral be used for marketing? Are events, conferences or networking meet-ups be the best platform for promoting the business?
Answer these questions thoroughly & provide market insights, competitive analysis & target consumer profiles.
Logistics are the key to this section of the business plan. Detail the day-to-day operations of the business.
How will the company operate? What are the regular tasks necessary for success?
Explain the various operational components of the business; in as much detail as can be provided.
While operations will change throughout the lifecycle of the business, it’s vital to have a strong plan in place from day one.
When it comes to operations, ‘winging it’ isn’t a viable option.
Management / Organization
Who is in charge?
How many key-stakeholders exist in the business?
Who are the decision-makers? What is the management hierarchy.
Define the structure of the business, including who manages the various components & whom reports directly to them.
If you’re running a small business, management may be a single person. Other times, teams of executives & managers may have input in the process.
Introduce all of the key management-level individuals & provide a brief history of their experience.
When it comes time to seek out investors, having a group of strong, well-known or respected managers may make the difference between gaining or losing interest.
Beyond potentially impressing viewers of the business plan, detailing the organization’s management team can also clear up any ambiguity. This section will lay out the roles & responsibilities of all key stakeholders.
What are the costs & expenses associated with starting & running this business?
How long (estimated) until the business turns a profit?
Break down the current financial situation & include any upcoming expenses that may affect revenue.
It’s important to be clear & specific in this section, so that all relevant parties are privy to the vital finances of the business.
Most businesses take multiple years to turn a profit, so being realistic about the financial plan is more important that promising huge, immediate gains.
If any loans, investments or funding has been received, explain what the invested parties have gained by providing money. Doing so will help potential lenders know what they’re getting into before writing a check.
Get Started: Writing a Business Plan Well
Writing a business plan is a critical part of starting any new business; it’s also great practice & may help the writer reevaluate the current plans & strategies of the organization.
When it comes time to sit down and write one, be sure to take it as seriously as you do every other part of your business.
Once complete, the document will represent the organization to potential investors, partners or stakeholders. Because of this, it’s vital to do the necessary research & provide a formal plan that can stand on its own.
If you’re not sure exactly how to get started, or what to consider before writing the business plan, take a look at this previous article, titled, What To Consider Before Writing Your Business Plan, which provides details on what to think about & organize before writing the actual plan.