How to Write a Business Plan
So you are wondering how to write a business plan.
A business plan is an effective, and often essential, document for any business to construct, as it describes a success plan for the business and how that plan is to be implemented.
The Purpose of a Business Plan
A business plan, which may be constructed for a new or existing business, is often a practical way of digesting the components of the business and examining each area as it relates to the overall success of the company.
An effective business plan can point a company in the right direction; it can define certain goals and strategies, serve as a sales and marketing tool, and provide investors with a clear picture of the business and its vision for the future. In the last scenario, a business plan can merely lay out the basic framework for a business venture to see if it is viable or profitable.
Steps on How to Write a Business Plan
If you would like to learn how to write a business plan, follow these steps to help pen your company’s way to success.
- If you are having difficulty starting your business plan, you may want to use a business plan template, as this can help you organize your business plan’s basic outline. There are several types of business plan software kits available, both online and in retail outlets.
- Most business plans include four basic sections: a clear description of the business, its profile and its vision statement; a marketing plan for the business; the finances for the business and an economic assessment; and the management of the business. This basic information should serve as your business plan outline.
- The description for your business should include a basic business concept, the business’ operating procedure, the focus of the business plan, and the fundamentals of the company’s operation.
- The marketing section for the business plan should include how the company is to be marketed, and what changes are envisioned.
- The finances section for the business plan should include loan applications, the business’ capital, its balance sheet, its breakeven analysis, the detailed finances month by month, financial projections and the business’ cash flow.
- The management section for the business plan should detail how the business is to be managed and introduce the members involved.
- You may also want to include certain documents in your business plan, including tax returns and personal financial statements for the business for the past three years, a copy of the franchise agreement, if applicable, a copy of the business license and resumes of all principal employees.
Important Elements to Keep in Mind
Although your business plan will certainly vary according to your type of business and your objectives, there are a few key points that should appear in every strong business plan.
Your business plan should always include a sound business concept, an understanding of the industry and market in which your business exists, a good management team, well-defined finances, and a strong and clear business focus.
You should always, however, understand the importance of clearly defining your business goals and not make the mistake of being too optimistic or unrealistic regarding the future of the company. Instead, you should always address the business’ weak spots and aim to develop a plan to address them and overcome them.
Understanding how to write a business plan is the first step to carving out a successful future for your company. The next steps are ensuring that your business plan solidly supports the hopes and dreams you have for your company.