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Writing a Business Plan

Writing a Business Plan

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Published by: shamp_a on Feb 20, 2009
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07/02/2009

 
WRITING A BUSINESS PLANTHE ELEMENTS OF A BUSINESS PLAN DOCUMENT
 
Introduction
Business Plans contain key elements that function to define the endeavors of abusiness enterprise. The preparation of a business plan must be completed bythe entrepreneur. Guidelines for the preparation of a business plan, whetherstart-up or existing business, are provided in this document. A "Do it yourself"attitude and application of these guidelines will produce an adequate businessplan to start a business and seek venture capital, seek outside funding forturnaround situations, or secure expansion investments.Business plans are the difference between a business that succeeds and one thatdoes not. While the entrepreneur must develop her own plan, it is essential tohave the plan reviewed by professionals, and modified accordingly. It may alsobe advisable to employ a professional proposal writer, accountants, lawyers, andother key individuals in its preparation. If the entrepreneur is going to needfinancing, partners, or government approval of some kind, then the need for aprofessional business plan writer becomes vital. Often the difference betweenthe well accepted and funded business, and the ones which fail, is in thepresentation of the ideas and the packaging of the proposal.
General Guidelines
Business plans should use simple direct language. It is advisable to place allparagraph "topic sentences" at the beginning of each paragraph. All majorheadings should be clear and followed by "topic paragraphs" which highlight thekey points of the section. This enables the reader, who may be pressed for time,to scan the plan and determine whether more complete attention should bedevoted to it. Also, the plan should be properly written in regards to grammar,spelling, structure, and punctuation. Having proofreaders and reviewerscomment on drafts of the document can save the writer time and effort in thelong run.While all business plans contain key elements, the content and organizationvaries from industry to industry, and also may differ based on the goal of theplan. Information will be repeated in different sections and explained to differentdegrees within sections. The right amount of detail should be included in eachsection. All business plans should however address the following major areas andcontain the following sections:I.Introductory ContentsII.Business DescriptionIII.The Market DescriptionIV.Development & Production DescriptionV.Management and Organizational StructureVI.Sales & Marketing PlanVII.Financial DocumentsVIII.Appendix
I. INTRODUCTORY CONTENTS
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 The cover page, executive summary, and table of contents will determine whatkind of first impression one makes on readers. In many cases, the introductoryelements, especially the executive summary, will influence whether readers readthe rest of the plan at all. A poorly prepared or unattractive document may noteven get a second look! Investors and venture capitalists may be presented withseveral proposals per day. They can not, and do not, read them all. Getting yourdocument looked at is a key step in the hunt for investment and support.
The Cover
 The cover of the document is often the "First Impression" of a business for anyinterested parties or investors. The purpose of a cover is to tell the reader whatthe document is about. Your cover should say the words "Business Plan," andshould include:1) Name and business name2) Company logo3) Address4) Telephone number5) Fax number6) E-mail address7) Other contact information The cover should be attractive and professional looking. Fonts used should beeasily read, and color contrasts should be pleasant to the eye.
Executive Summary
 The executive summary is what most readers will read first. Lenders in particularread executive summaries before looking at the rest of a plan to determinewhether or not they want to learn more about a business. An executive summarymay also be used singularly to attract potential curiosity in your company andcan be "followed up" with a complete plan if investors are interested. Theexecutive summary is the first part of your plan, but it should be written last. It isan abstract of the pertinent essentials of your business plan. The wording shouldbe chosen very carefully. The executive summary should be short, attentiongetting, and understandable.
Table of Contents
All pages of your business plan should be correctly numbered and the table of contents should include page numbers. Be sure to list headings for the majorsections as well as for important subsections. Thumb tabs for the documentsheadings are a nice feature and indicate a professional document.
II. BUSINESS DESCRIPTION
 The business description is the "Business Vision", and includes: who thecompany is, what it will offer, what market needs it will address, and why the
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idea will work. A business without vision is a business that will not know what it isdoing! The description should include:1) An overview of the industry the business will be in.2) A description of the company.4) The company's positioning.3) Descriptions of the company's products or services.5) The company's pricing strategy.
The Industry Overview
Begin the business description with a brief overview of the field the company willbe competing in. This is not a discussion of your competition. One is providing anoverview of the industry where it and other companies like it will vie. Describetrends in the industry, some history and projections. Do not rely on "bestguesses," but use actual industry data from trade associations, governmentreports and trade journals to support the descriptions. Do not just report thepositive side of the industry, include the negative too! For example a discussionof an Internet Services business may include problems anticipated with thenumber of telephone lines available, or other infrastructure problems with thephone companies involved. Show that all conceivable aspects have beenconsidered.
The Company Description
Begin with your mission statement - a one or two sentence description of thepurpose of the business and to whom the product or service is targeted. It is vitalthat an entrepreneur know what business they are in. Not being clear in themission statement indicates that one is not clear about the purpose of one'scompany. It can also indicate that a business is not prepared for the market.When the railroads failed to recognize that they where in the transportationindustry, and not the "train" business, they lost out to trucking and airlines formarket share. A business person should pay very close attention to thisstatement, as all else hinges on it. If during the building of the rest of the planone discovers that the plan is not correlating to the mission statement, then themission statement or the plan must be modified.Describe the business. Give a brief history and include information like whether itis a corporation, a retail, or service business. Be complete as to ownershipstatus, location of operations and other pertinent information.When discussing the company's principals, one doesn't need to provide acomplete resume. The resumes are included in another section. You can howeverpoint out interesting qualities of the principals. For example, if one of the ownersof a research firm has been recognized for discoveries in his field and it relates tothe business, then one may include a statement like "Biochemist John Blow, whodiscovered the X factor in 1994, will head up the research team."
The company's Products or Services
Describe each of the products or services. Go into as much detail as necessaryfor the reader to get an understanding for what the enterprise will be. Make itinteresting. It is important to point out how your particular enterprise is different
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