Writing your business plan in 5 easy steps
Follow this 5-point guide to keep the business planning process simple—and fun!
It's time to roll up your sleeves and get everything down on paper.
When you decide it’s time to document your brilliant ideas and strategies for your new business, follow this 5-point guide to keep the process simple—and fun!
Before you can begin to write your business plan, it’s important that you’re clear on its purpose. Business owners need a plan for three reasons: to obtain financing, to attract investors and to guide team efforts.
Lenders want to see how you intend to repay them. Investors want to know how your business will eventually quadruple their money. Your employees (or just you) will use your plan to guide business building activities.
With a clear purpose in mind, it’s time to start writing up your plan.
Your plan should demonstrate the feasibility of your business and how you intend to achieve profitability. To do that you’ll need solid research.
Before you type one word, find out:
The more information you collect, the better. You may not use all of the data you collect but it will help to have it handy in case someone asks you questions or challenges your strategies.
It’s useful to do your thinking through numbers. Nothing is more real than dollars and cents, ratios and percentages. Working to put together your financial figures will force you to think about different aspects of your business.
There are three main financial statements to include in your plan. The income statement presents your (actual or projected) revenue, expense and profit or loss. The cash flow forecast indicates the amount of money entering and exiting your business each month. While the balance sheet takes a snapshot in time of business assets and liabilities.
For example, take the cash flow forecast. Using a simple spreadsheet, this financial statement can detail all of your monthly operating expenses—right down to the cost of your mobile data plan. Don’t know how much data plans cost? The cash flow forecast can act as a reminder to investigate such numbers.
Use the numbers from the second step to explain your thinking. For example, the revenue projection found in the income statement is based on your anticipated sales—the number of customers you expect to sell within the year, and how much money each one will pay.
Explain the strategy behind those numbers in the body of your plan.
Describe your thinking within these key business plan sections:
Once you’ve written a basic draft, share it with people who can provide objective feedback.
Approach an accountant, lawyer, banker, marketing specialist, and other experienced business owners for their input. If you are seeking investment, ask an investor to review it from their unique perspective. You want people to punch holes in your strategies, challenge your numbers, question your research and make you sweat through the answers.
Longer business plans are not necessarily better business plans.
Take the feedback from the review stage and get to work on the final version of your business plan. Go through the whole thing to see where you can tighten your thinking, clarify your intentions or remove any unnecessary sections. Remove any flowery language. Make your plan crisp and concise by boiling it down to the bare essentials.
If possible, ask a few of the people who first reviewed your draft plan to read through the edited version.
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