Writing a Business Plan – A How-To Guide

Lots of people want to start their own business. One of the first things that stops these would-be entrepreneurs from realizing their ambitions is the seemingly daunting task of writing a business plan. Writing a business plan, though, is a rather easy task if you understand your business, so let’s take a look at what a business plan entails.

Before we jump into drafting our business plan, we should think about why we are writing a business plan in the first place. Most business plans are used to secure financing for a business – whether it be a start-up or an existing company looking for additional capital. This financing could come from a bank, an equity or venture capital fund, friends, family or just about any other potential investor you could think of.

Another reason to write a business plan is to organize yourself, make sure you have thought through all the components of your business and make sure that it makes sense. A great idea for a product or service may not amount to a great business unless you can turn a profit through effective marketing, management of expenses, management of accounting and information systems, etc.

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5 Points You Can’t Forget on Your Business Plan

If there’s one key determinate of the success of your company it’s your business plan. You need to make sure your business plan contains all of the details that you can conceive of, and that you make sure all of the pieces thoughtfully fit together properly. At the very least your business plan needs to include:

1. Summarize Your Goals for Your Business

You can’t reach a goal if you aren’t building towards it from the beginning. You want to be as specific as possible when you write down your business’ goals. All businesses need a minimum of one single clear goal, but most businesses will have a range of large goals they’re working towards. Before you do anything else you need to figure out what measurable and unambiguous goals you’ll be working towards. This is square one, the first step that all your other plans will rely on.

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Why Write A Business Plan: Launching Your Business With The Fundamentals In Mind

A famed book by Stephen Covey highlights one habit that makes individuals and organizations succeed – begin with the end in mind. This is a very good answer to the question “why write a business plan”? It is tempting to put up a business and have a see-what-happens-next approach towards its management, twitching things along the way and be flexible enough to the challenges of running a business. But the truth is, even though that sounds simpler than drafting an exhaustive plan in paper, it can really get complicated – fast. In fact a business without a business plan is, put bluntly, a business that is planning to fail. A business must be intentional, and nothing can facilitate this better than having a written plan of what the business is all about, its direction, its goals, and its ultimate purpose. This will serve as the glue for the stakeholders of the business, a point of agreement on how the business should be run, and the route it would take to realize its profit targets.

It is simply impossible to grow a business if there is no tangible point of reference to where the business should go. Vision, mission, objectives and values of the business are all included in the drafting of the business plan, thereby making it possible for organizations to have objective metrics of performance. It is only then changes and adjustments can be effectively implemented. You simply cannot improve what you cannot measure.

Writing a business plan is important because it allows a business to sell itself better to its customers. The business plan is a 360 profile of your business model, giving you a bird’s eye view of what you can offer to your clients. Marketing would not be as hard because the point of differentiation and the niche market you want to develop overtime can be clearly seen. You can identify your competitive advantages and then capitalize on that exhaustively. It can also bolster your positioning efforts because you understand the strengths of your services or products. You can simply develop strategies that puts you in the best spot to both retain and attract new customers.

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