When planning to write a business plan, you need to become very familiar with what it is, what it’s for, who its for and what it contains. Essentially, a business plan is a roadmap of your own business that will outline its visions and goals, and how it will achieve the stated goals. You need to detail the company’s ethos, targets, the market its in and how it fits into this, the value it proposes, its operations and finally, its forecasts.
Business plans can vary, which is why it’s good to make it with a purpose in mind. If it’s for investment, then why not put extra emphasis on investor financial ratios? Regardless of who it’s for, the general outline will look something like this:
- An Executive summary – brief introduction overviewing the business, target market, finances and proposed value
- Company overview – detail the company history, management, legal structure, locations and finally the vision of the business
- Marketing and sales strategy – Know your market, market analysis, potential market
- Management team and personnel – information of each management team member
- Financials and forecasts – this includes, ideally, the four financial statements, along with a personal plan, sales forecast and business ratios
One of the biggest components to a business plan is having the correct, up-to-date data ready for you to communicate it. This means really getting to know your market and past performances in particular. After all, how are you going to claim accuracy or realism over your forecasts if your historical numbers don’t add up, or if you don’t know much about your target market.
As touched on above, having a purpose behind the business plan is important. This doesn’t mean you can’t create one wholly for yourself — that’s fine. But why? Do you want to better understand the value of your business? The performance compared to your competitors?
It’s important to know the audience of who you’re showing the plan to. If it’s because you want to be approved of a large bank loan, then some things clearly stick out as uber important, like previous credit, cash flow, liquidity and reliability. These can then be emphasised in the right sections of the plan.
Keep it concise
Use models, infographics, graphs and so on. Not only will this make the business plan more digestible for the reader, but it will mean you can fit more information in. Graphs and infographics are a great way to communicate ideas and data that would otherwise be harder to visualise. This is just as much of a persuasion technique than it is design.
Models are a great way to show that you’ve covered all bases on a given topic, and that you really understand business application. For example, using SWOT and PESTEL are great ways to explain detail your market analysis and where your company fits into the market. You can do this through writing paragraphs and prose, but it would be much more difficult to read and digest. Using models means you can cram more information, yet prevent yourself from verbose over explaining or being overly descriptive. This is a great way to provide more information, yet keeping things more concise.
Revision and second opinion
Lastly, it’s extremely difficult to gain perspective on your own project. Business plans take a long time to write, and anyone that has ever written a dissertation will know that you can end up completely losing perspective on if you’re going too far off topic, or if you’re simply sounding stale in your writing. It’s also harder to simply edit grammar mistakes on a screen that you’ve written on.
Print off the business plan. Read it several times. Read it backwards, starting from the financial forecasts. Make some edits and then hand it over for a second opinion from someone you trust. Conversely, you can simply find a reputable freelancer or business that will consult you on the plan, its strengths and its weaknesses.