How to Write
a Business Plan
Whether you are writing
a business plan for a new business opportunity or for
an existing business, the principles are basically the
same. It involves taking a hard-nosed and honest look
at the business. Using the knowledge of research or
past experience, the plan should set targets and objectives.
It should involve building sustainable
strategies - working through ideas and the implications
so they are not just introduced on a whim. It should
provide the benchmarks against which to review progress
and measure success or failure.
It does involve taking
the time out to do it, but if you’re serious about
the success of your business, then you must make the
time. While the plan should essentially be the product
of the owner/manager to ensure ownership and commitment,
it would be wise to enlist some help to complete it
in a reasonable timeframe. An external consultant can
advise you on the best format to use for your business
and will also provide guidance and, most importantly,
be objective about the plan in relation to the business.
If you have an existing business, contributions from
senior staff may help with some lateral thinking and
their involvement should encourage successful execution
of the finished plan.
Here are
some guidelines on how to write the plan:
Be clear on who you
are writing the plan for
The way you write your plan will depend on who is ultimately
going to read it. Should the emphasis be placed on ‘selling’
the plan to investors or is it just an internal strategic
plan for the management team?
Choose
a format
Equally important is selecting a format to use, which
both suits the purpose and is practical for you. You
may consider a software package, which has the advantage
of being interactive and updateable for future use.
Make sure the template is adequate for your needs (See
Business
Plan Software and Business
Plan Template)
Set
a timetable
Set out target dates for completion in sections and
allow enough time to review and produce revised drafts
of the plan – at least five drafts would not be
unusual. But do not extend the dates over too long a
period (ideally limit to two months for a complex plan,
less for smaller plans) otherwise you may be forever
incorporating changes and never get the plan finished!
Presentation
Keep the written part of the business plan as concise
and brief as possible – it’s the quality
of the content that counts, not the length. Start each
section on a new page. Number and date the pages. The
plan should be neatly presented, with no grammar and
spelling errors, clearly laid out in an easy to read
format – use short paragraphs, plenty of headings
and bullet points. Write in layman’s terms, in
the third person and avoid any personal viewpoints
Be
realistic
Everyone thinks their business will grow exponentially
but in reality this is rarely the case. Avoid being
over-optimistic with your figures - your business plan
must show a realistic path to profitability with adequate
marketing support and a sound operational and personnel
infrastructure.
Essential
Content
Cover page & Table of Contents
Executive Summary – One page summary of key points
Sections - Introduction, Marketing, Personnel, Operations,
Finance & Risk Assessment
Financial Projections – 3 year Sales Forecast,
P&L and Cash Flow Forecast , Balance Sheet (possibly)
Appendices - CVs, charts, drawings, evidence, etc, numbered
and referenced from the text in the plan.
Get
someone to check it
You need to produce financial projections that accountants
will endorse without question, so it is advisable to
get an accountant to check your figures. If an investor
finds a flaw they may start to doubt the integrity of
the whole plan. It would also be wise to get an outside.
It would also be wise to get an outside advisor or business
colleague to review the plan.
Make
sure you understand it
As it will be you who will have to answer any questions
from your lender or investors, you need to understand
everything that is written in your plan. Having someone
else write your plan may save you a headache, but you
might be caught out under scrutiny if you don’t
fully understand it.
stepbystep business
plan software provides everything you need to write
your plan - see demo
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