How to Write a Business Plan
A business plan is usually drawn up with solid reasons in mind, when a person or a group of people – such as a new company, or one that is planning a fundamental change – have formulated ideas for a new or radically changed enterprise. This kind of plan has a special format, and it must be written exceptionally well in order to achieve its aims.
There are three aims of a successful business plan: to clarify the businessperson or group’s ideas for a company or firm; to demonstrate these ideas to investors or partners; to approach a bank or financial institution for a loan.
Business plans are also regularly written by commerce, economics, and business students who plan to find careers in the banking or business arena.
Steps for Writing a Business Plan
- Understand that a great deal of planning must take place before you can write the plan. A number of meetings and discussions must take place. Investigations must occur, calculations must be made.
- Make a list of all meetings, discussions, and interviews you need to complete.
- Create a folder for notes, brochures, and business information.
- Organize your notes into product research, marketing research, promotions, accounting, and sales.
- Make a point list of all aspects to cover in the business plan.
- Ensure you include a client or customer profile.
- Write paragraph notes about the action plan you propose, and the competitive advantage and selling propositions.
- Write an introduction which shows you fully understand what is required of you and how you see the business start-up, development and progress.
Selecting Points to Include
Some businesses provide goods, others provide services, and some provide both. This means that not all businesses are the same. Because of this, not all business plans are the same. Each one addresses the unique commercial mix of which the main idea is comprised. Some can be:
- Description of the main idea
- Business structure
- Location of premises
- Products or services
- Identified markets
- Industry trends
- Main competitors
- Key activities
- Mathematical and financial projections
Key Points to Consider
- Many meetings and discussions must take place prior to writing a plan. Even if the business is to be a sole trader or an independent operator which only employs one person, meetings must take place with investors, loan providers, suppliers of primary materials or parts, prospective market representatives, publicists, and a number of people already involved in the industry.
- Minutes must be taken for each meeting, and the notes must be organized in a logical sequence.
- All documentation of permits and other evidence must be assembled. Make certified copies; this means having the correct public officer in your area witness the copies, and place everything in a card folder. Open a word processing folder and type the notes, which are easily re-worked into the correct format later.
- Remember that facts and figures are in this case just as important as ideas and opinions. The people reading the business plan need detailed information about the points listed above.
- These points form the basis of the business plan. You need to express yourself well and without flaws or ambiguity, organize your materials properly, and delete anything which might introduce confusion or uncertainty.
- It is important to use effective and clear writing techniques in a successful business plan. Three basic persuasion techniques are: use facts and evidence, apply logic and reason, and appeal to the intelligence of the reader. Readers of business plans are usually loan officers, public officials or examiners.
- Combine all the valid points that relate directly to the business you have in mind, without diversion.
- Each point can be built into a paragraph, using notes and paraphrased material from your certificates, procedure manuals, suppliers, and meetings.
- Choose a writing style that is semi-formal and precise: do not make the mistake of using conversational language, since it is inappropriate for a business plan.
Dos and Don’ts
- Business plans should not be persuasive. The role of such a plan is to present facts, figures and projections to interested parties who might develop a working concern in the enterprise. Rhetorical language and trying to impress will not work.
- The most common mistake found in business plans is a failure to mention the skills and aptitudes of the entrepreneur. A list of attributes, how they were achieved and developed, is an important part of the package, because a businessperson’s skills are part of the capital of any business.
- It is not wise to omit any item of importance, such as marketing, product details, provision of parts or raw materials, and so forth. Those reading the business plan need to witness careful application to the submission process.
- A frequently seen flaw in any plan or piece of writing submitted to others is rushed or unprepared writing. Research, meetings, calculations and projections all take time, and drafting a plan from all this material must be painstaking and correct.
- It is important to understand what information you need to include, and to address each aspect personally and clearly, to show how well you have developed your business idea. You must express why you want to start that particular business above all others, and how important it is as part of your life plan.
- Poor language skills, inappropriate or irrelevant vocabulary, the wrong tone, and errors of punctuation, grammar, syntax, and structure demonstrate low aptitude. A business plan demonstrates the kind of businessperson you are, and the kind of work you are capable of.
Now that you have acquainted yourself with the basic business plan writing tips and rules, you can check out our great business plan proposal samples to link theory with practice.