fbpx

Business Plan Basics: How to Write a Business Plan

10 Nov Business Plan Basics: How to Write a Business Plan

articles-bannerSlide thumbnail

ARTICLES

Business Plan Basics: How to Write a Business Plan

business plan

Without a doubt, the most important document you will produce as a business person is your business plan. Not only will your business plan form a blueprint for your business but it will also enable others to see that you’re focused on succeeding and that’s important when you’re looking to attract funding whether it be from a bank or an investor.

Sadly too many business people either don’t write a business plan at all or think that it’s something that they can quickly scribble on the back of an old envelope. If that’s your approach then you’re going to regret it when you’re looking for funding or when your business runs into some challenging times desperately need to remember what your original plans were so that your business can survive.

That doesn’t mean that your business plan needs to be set in stone … or that you can’t make notes on the back of an old envelope because you can. What it does mean though is that you need use those notes to prepare a rather formalized business plan and keep it updated as times change and your business grows and you need to understand that the people who may read are professionals and they will be using it to assess whether or not your business is worth investing in.

So what do you need in a formal business plan?

How to Write a Business Plan

Executive Summary
Get this section right and the people you need to impress will read further … get it wrong and your application for funding will be tossed into the bin along with so many others.

Your executive summary should contain a concise overview of where your company is going and where it has come from. Many experts recommend that it’s the last part of the business plan that you should write even though it’s the first part that investors will read.

First, you will need to include the date the business began and who started it. The number of current employees and the location of the business is also important along with a description of your business premises and details of the products that you produce also go here. Similarly, this is where you would detail your unique selling points and future plans.

Your banking relationships and who is currently investing in your business are also part of the executive summary.

Marketing Analysis
This is the part of your business plan where you talk about the industry that you operate in and what that industry’s outlook might be. You should also clearly define your target market, the way and times that they interact with your business, and the way in which you will target that market both now and in the future.

It can also be important to clearly state the time it takes you to produce your products and get them to the market place. Don’t be afraid to include some pointers on where to find more information about your target market.

You should clearly identify your competitors along with their strengths and weaknesses as well as any government rules or regulations that apply to the industry you’re working in.

Company Description
Here you need to describe what your business does, how the various parts of your business fit together to produce your products, and why your business will be a success. You also need to clearly state how your business will keep your customers happy.

Organization and Management
Investors need to know what the organizational structure of your business is. Who reports to whom, who oversees which parts of the business, and who is ultimately responsible for decision making.

You will also need to list your management team and their qualifications in your business plan, not to mention your advisers if you have people outside of your business that you consult with.

Marketing and Sales
The first thing you need to do is to define your marketing strategy … in other words how you are going to create customers for your business. This section is something that needs to be flexible and constantly under review to ensure that you’re spending your marketing dollars wisely.

When it comes to sales, you need to outline your strategy here too and make it clear who your sales people will be and where they come from. Will they be employees, contractors, or outside sales people?

Service or Product Information
In this section of your business plan, you need to clearly define what you do or what you produce and show how it will benefit customers both new and old. Indicate the areas where your business has an advantage and what your market may be prepared to pay for your service or product.

You should also indicate what you are doing to improve your product or service or even bring new products and services online.

Funding
This is where you ask for the money that you know you will need to either get your business off the ground or keep it growing. You should discuss how much money you need right now, how much money you might need in the future, and how you will use that money to make your business grow.

It’s a good idea to detail your future goals in this section of your business plan, focusing on the financial impact they will have on the business and how much growth you expect from it.

Financials
There are two major financial documents that you should include in your business plan. The first is the historical financial data that pertains to the business. If you’re looking for funding, then be prepared to supply data going back up to five years or more.

That five year span is also important for the second financial document that you will need to provide and that’s the one that looks into the future. You will need to supply figures for your income forecasts, cash flow statements, and expenditure budgets. Years two to five will be on a yearly basis, but you should be prepared to provide figures for the first year on a quarterly basis.

Obviously the figures you provide should match the amount of funding that you are requesting.

Appendix
The amount of information that goes into the appendix of your business plan will depend on what is required by the person who is reading it, but they can include things such as your resume, references, credit history, market studies, product photos, references to reports and documents that you have mentioned in your business plan, permits, contracts, and more.

Now if you thought that writing a business plan was simple task when you started reading this article then you have probably changed your mind. But don’t let this list frighten you. Work through it step by step and you’ll be able to approach investors with confidence.

singleblog-question

FAQ’S

Get some FREE business advice
asked by small business owners.

singleblog-arrow

RESOURCES

Find the Government forms and
business links you need

EM Advisory Corp is an Advisory firm that connects with people. Our advice is rooted in our experience and personalized to your needs. Search our site for related Articles. Browse our FAQ’s for Answers and use our provided information and Services to help you solve your situation.

Article Categories

left_bq

  • COMMENTS FROM OUR CUSTOMERS

    “I feel like a hero to my Board of Directors thanks to you. Your confidentiality is much appreciated and your suggested changes to our approach with the new structure to handle the referral pass-through have worked so well that we needed to put 5 new associates in place, thank you again.”

    - I. E. W.
  • COMMENTS FROM OUR CUSTOMERS

    “Your analysis of our current marketing efforts turned out to be spot on. Your suggested changes are already showing results over the last 60 days of running them, thank you, your services are under rated. We will be calling again.”

    - V. B.
  • COMMENTS FROM OUR CUSTOMERS

    “I thought that putting your company on retainer was a waste of our resources, and time. I have never been so wrong, and so happy to be wrong at the same time. It would be my honor if you would consider a permanent position within our corporation.”

    - Y. N. O.
  • COMMENTS FROM OUR CUSTOMERS

    “I can’t deny that your services are invaluable. Not one person in my company was able to see our own mistakes. It does take a trusted advisor to look in from the outside and you have been that advisor. Thank you, for showing us a way to identify and correct these issues for the future.”

    - W. T. H.
  • COMMENTS FROM OUR CUSTOMERS

    “One simple paragraph in our 98-page contract created a lifetime of residual payments back to the Partnership, thank you for seeing it. The statement you made is so true, “attorneys are not businessmen.” We will call you when we prepare for our next purchase.”

    - H. T.
  • COMMENTS FROM OUR CUSTOMERS

    “The promotion was a complete success. The way you structured it allowed me to deduct the campaign and giveaway expenses from my taxes. The biggest benefit has been the permanent increase in my customer base. Thank you.”

    - Y. B. P.
  • COMMENTS FROM OUR CUSTOMERS

    “I never thought that the use of a separate website could benefit this section of my business. That thinking was just being out of touch with my own customer base. Our overall transactions have tripled over this last year. Our future continues to grow again.”

    - P. T. B.
  • COMMENTS FROM OUR CUSTOMERS

    “One month! You changed our direction in a month. I never realized that I was inadvertently forgetting about what has turned out to be a profitable division of the business, and that same division was our problem, to begin with. Your quick analysis gave us the step up we needed.”

    - R. O.
  • COMMENTS FROM OUR CUSTOMERS

    “Until I saw the numbers with my own eyes, I did not, could not believe what you were telling me. But it is true, you saved me over $600,000 of unneeded advertising spend in the first 6 months of this year over last year. I was most impressed with the fact that we sustained the same revenue, thank you.”

    - S. V.
  • COMMENTS FROM OUR CUSTOMERS

    “You are correct, everything is a negotiation. I am very glad that you sat on our side of the table with the quite expertise you demonstrated. This sale will allow myself and my family to choose again.”

    - S. M. T.

business advisors

SET UP YOUR
FREE 30 MIN
CONSULTATION





Choose the Services You Need to Discuss
Business PlanNew BusinesseseCommerceNon-ProfitEnergyPresenceFinancial IndustryProductsFinancial ServicesSalesManufacturingStrategyMarketingStructureNegotiationTechnology

FAQ’s
No Comments

Sorry, the comment form is closed at this time.