People who are starting a business for the very first time will often ask “why should I write a business plan?” and they’ll say something like “it’s all in my head”. Almost all successful business people without exception will tell you that a business plan is essential.
You can get entire books on writing business plans so this SECTION will only cover the basics.
The Importance Of A Business Plan
It’s important for the same reason as not writing your goals down. If you don’t know where you’re going you’re like a ship lost at sea without a destination. Without a destination in mind you’ll be going nowhere fast.
Your business plan is like a map. The more information it contains the easier it will be to find the destination and goal you had in mind. Writing a business plan can be a lot of work depending on how detailed you make it, but it will pay off tremendously in the end.
A business plan will you keep your finances in order and you’ll be able to see what is priority and what isn’t.
If you’re planning on getting money from an investor, bank or other outside source you’ll need a business plan to show them. This goes more or less without exception. The investors want to see that you know what you’re doing.
A business plan will change with time because it does not only explain what your business is about and how it works but it also explains where the business is going and how it will get there, all those will change and you business plan will need to change accordingly.
How A Business Plan Should Be Structured
A business plan should be no more than 20 pages and you can usually get by with a lot less than that.
Most experts on the subject of business plans recommend breaking it down into 7-8 sections as follows:
- The Executive Summary: even though this section appears first, this section is written last. It’s essentially a summary of the entire business plan.
- The Industry: This section is an overview of the industry your business will be operating in. These sections should include information on industry trends, the major competitors in the industry, and industry sales.
- Market Analysis: This section will cover the primary target market for your product or service, and it will include information such as geographic location, demographics, your target market’s wants and how these wants are currently being met.
- Competitive Analysis: This will be an examination of your competitors, with a look of their competitive advantages and how you will be able to overcome any barriers to your market.
- Marketing Plan: This section is a detailed description of your marketing strategy which will include a pricing plan, and any promotional plans.
- Management Plan: This will be an outline of the legal and management structure of you business. This will include your internal and external management team/resources.
- Operating Plan: This is the section where you describe the physical location, facilities and equipment of your business. You’ll also want to describe the inventory requirements and suppliers, and include a description of the manufacturing process (if any).
- Financial Plan: Here you should describe your funding requirements and how the money will all be used.
You can use this format for any business.
Check out Bplans (www.bplans.com) for samples of other business plans. Find a business plan for a business similar to yours and see how they’ve done it. It can be extremely useful.
Getting Help With Writing The Business Plan
Your business plan “should” be very specific and a little research will be required. Paying a professional to write your business plan can pay off in the end if you’re not sure how to go about it.
There are a few computer programs and templates out there that can assist you in writing the plan. We suggest Business Plan Pro which can be found at: www.paloalto.com
Deciding Whether Or Not To Hire A Professional
Not all businesses need a professional business plan. If you’re initially going to start your business on a part time basis and you plan on starting without an outside investment a solid detailed plan is not needed.
If you want outside startup capital from investors, you’ll want a polished professional business plan. A business plan consultant/writer will word your plan in such a way that speaks to investors. They’ll add all the essential information that the investors will want to see. A professional will also help you save time if that’s an issue for you.
What You’ll Get From A Professional Business Plan Writer
A business plan writer will require a lot of information from you.
The job of the writer/consultant is to translate your thoughts and plans into a cohesive business plan that will be both effective for you and the investors.
The going price for a business plan writer/consultant ranges anywhere between $1,500 to $5,000, depending on the requirements.
Before deciding to hire a professional check out the following sites since they may contain all the information you need to write a business plan yourself:
If you do end up deciding to hire a professional be sure that they have experience with your industry and online businesses. Read other business plans written by the professional and ask for references.
As with all contracts, make sure that all the final terms are in a written contract. With specifics of what each party member is responsible for.
Thinking Long Term When Writing A Business Plan
Your business plan is something that should always be kept in mind. It should be referred to often and changed if needed.
Referring to your business plan often will help you deal with any issue that arises and it will guide you in any decision making situations. Ask yourself if the decision will take you closer or further away from your vision.
It’s very easy to lose focus when running a business. You’ll get caught up in the small things and lose sight of the big picture. Rereading the business plan will keep you on track.