Writing a Business Plan

 

Whether you plan to raise capital for your business by getting a loan from a financial institution, or whether you plan to raise money from private investors, a strong business plan will be one of the major tools in your presentation. Don’t disillusion your potential investors by handing them a cookie cutter plan that you printed using business plan software. Instead, take the opportunity to write your own business plan that is customized to the needs of your particular business and highlights your business’ strengths in its marketplace.

First, prepare to write your business plan, just as you would prepare to write an academic paper in school. Do your research. Frankly, this is all work that you should have undertaken when you first began to plan your business. If you did, then you will find writing your business plan easy – if not, then it’s time to take a step back and start setting goals for your business and planning for the future.

1. Collect data about your market. What market do you plan to serve? What will be your main products or services? How does your product or service fill a specialized niche in the market? Are other businesses already serving this market? How much of the market is already cornered by existing businesses? Have you already begun operations? If you have, your income and expenses from day one to the present time will provide you with a rich source of data to analyze. What customers and clients do you have in the pipeline for the future? Do you have commitments from customers for future orders?

2. Paint a realistic picture of your capital. How much money do you have set aside to start up this business? What do you realistically project that your business income will be over the coming months? What do you realistically project that your expenses will be over the same period of time? What unexpected emergencies could arise to disrupt your planned income and expenses, and how do you plan to adapt to those unexpected events (which happen to all businesses)?

3. Be honest with yourself – and then be honest with your investors. What are your business’ true strengths and weaknesses? Do not try to hide the weaknesses of your business from potential investors. Instead, turn each weakness into a strength by showing investors how you will address that weakness. Make a plan for how to deal with it so that investors can see that you have thought about this concern and made a realistic plan. Likewise, think hard about the strengths of your business. Does your business have strengths that you may not have thought about until now? Highlight those strengths in your business plan.

4. Sketch your business plan graphically. Consider using a graphic organizer as your organize your thoughts related to the future of your business. Actually, you will probably want to use several graphic organizers, and you may end up including a polished version of these organizers in your completed business plan: a spreadsheet that can generate reports and graphs that show the changes in income and expenses for your business over time, for example, and a timeline that shows major milestones in the past and future development of your business.

5. Write your business plan simply and without using too much jargon. Respect the time of your potential investors and lay out your plan in a way that they can quickly scan in order to quickly see the bottom line.

Remember, writing your business plan is not just a hoop that you must jump through. It is a dynamic part of the process that will lead you to success in your business. And it’s just the beginning of a process of planning and developing your business. Later, once you have gotten past this initial milestone, you will find that planning and projecting future developments is a major element in your business success. 

 

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