Writing Your Business Plan
Writing a business plan involves creating a well-organized document that includes a description of your product or service, marketing plans defining your target market, financial projections, and the other essential elements that make up a high-quality business plan.
After you've considered the purpose of your plan and done some background preparation, it's time to consider the actual elements that you'll include in the written document.
A business plan customarily has a number of major elements or sections. Each of these elements serves a particular purpose in the overall presentation of your plan. The following list identifies and briefly describes each of the documents or document categories that will make up your plan. They are presented in the order in which they usually appear; however, this format can be deviated from if another way makes more sense because of the nature of the business. For example, the financial portion of a plan for a business with a 20-year track record is much more important (and comprehensive) than the financial portion of a startup business's plan.
The relative mix of product and services to be offered can also affect the content of a plan. Issues relating to inventory, production, storage, etc., become less significant as the product/service mix moves toward a purely service business. For example, a business that relies on the services of many professional employees would provide substantial details about acquiring and retaining these vital workers.
It is recommended that all the major issues listed below are included, even the ones that are relatively less significant to your particular business. Anyone reading your plan will be more confident about your assessment of the situation if you identify such issues and resolve them, however summarily. For example, if you plan to work alone and perform all services personally, you might note that you anticipate no need to hire employees or engage independent contractors if the business succeeds at the levels projected in the plan. You don't want to raise any questions in the mind of your audience that aren't resolved somewhere within the plan document.
Remember that there is no requirement that these items be created in the order shown. In fact, conventional wisdom suggests that the executive summary, which is preceded only by the cover sheet and table of contents, should be prepared after the rest of the plan is complete. The components of a written business plan are:
- General Format and Presentation. A business plan is a clearly recognizable type of document, and your audience will have some expectations with respect to style and contents. Just as your teachers in school expected you to conform to certain standards, the people who will look at your business plan will have certain expectations.
- Cover Page and Table of Contents. These pages identify your business and make it easy for readers to find and examine particular documents.
- Executive Summary. This is arguably the most important single part of your document. It provides a high-level overview of the entire plan that emphasizes the factors that you believe will lead to success.
- Business Background. This section provides company-specific information describing the business organization, history, and the product or service the business will provide.
- Marketing Plan. This section presents an analysis of the market conditions that the business faces, sets forth the marketing strategy that the business will follow, and provides a detailed schedule of marketing activities to support sales.
- Action Plans. This section describes how operational and management issues will be resolved, including contingency planning.
- Financial Projections. This extremely important section provides your projections (and historical financial information, if available) and demonstrates how the business can be expected to do financially if the business plan's assumptions are sound.
- Appendix. This is the place to present supporting documents, statistical analysis, product marketing materials, resumes of key employees, etc.
Business Plan Formatting and Presentation
Before discussing the contents of a business plan, let's take a few
moments to consider some basic issues regarding the format and presentation of the plan. Your plan should look professional and be a useful tool. There are a number of things to do to ensure that:
- Print the plan on a high-quality paper. Print on one side of the paper only.
- Incorporate a cover page that includes your logo, company motto,
or other identifying information or graphic. Be sure to include
identifying information for the business and to name the person who
should be contacted regarding the plan.
- Use a typeface that is easy to read, and a font size that is
large enough to prevent eye strain. This may require that financial
projections be spread over several pages in order to maintain
- Maintain reasonable borders.
- If your business uses specialized language or acronyms, use them
sparingly and be sure to define any terms that someone outside your
area of expertise wouldn't readily know.
- Number the pages and be sure that the page numbers are accurately reflected in the table of contents.
- Keep the plan short and concise. Limit the inclusion of
extraneous material. You can always provide additional detail in an
appendix, if required.
- Include samples of ads, marketing material, and any other information that aids in the presentation of your plan.
- Carefully edit the document. Spelling and grammar errors do not make a good impression.
- Bind the plan so that it lays flat when opened.
- Don't go overboard on expensive binders, binding, embossing,
etc. Elevating the look of the plan over its substance can raise doubts
among those reading the plan. But avoid looking cheap or sloppy.
- Don't get carried away on slick presentation pages; there are
times when presenting information graphically is appropriate, but unless
you're a graphic artist, your audience isn't going to be impressed by
the graphical quality of the plan.
Cover Page and Table of Contents
If you have spent any time and effort at all on a company logo,
slogan, or other identifying graphic or text, highlight it on the cover
page. If you haven't considered these basic marketing tools, we strongly
suggest that you do. Building an identity is vital if you want people
to recognize and remember your business.
In addition, the cover sheet should contain all the usual and
appropriate identification information about the business. This includes
business address, telephone numbers, facsimile numbers, etc. The cover
sheet should state the date that the plan was prepared, and the period
it covers. It should identify the person to contact regarding any
questions about the plan (generally, you). If you have prepared multiple
copies of your business plan, you might also put a copy number on the
cover page to identify them.
The table of contents should clearly and simply lead a reader to each
of the documents in the plan. Be sure that page numbers are accurately
reflected. If the plan is large, consider dividing it into separately
numbered sections. For smaller plans, just numbering the pages in
sequence is fine. If your table of contents is more than one page long,
reconsider the length of the entries, the length of your plan, and the
number of documents you've included.
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