Let’s get down to the business of writing a business plan. There are a myriad of resources to help you with the process, each of them containing basically the same information with slightly different styles and formats.
Make the first plan your own
The book “How to Write a Business Plan,” by Mike McKeever, offers two routes: the comprehensive plan and the “quick plan,” which can be completed in one day. This comes in handy if you choose to write a preliminary plan for yourself, as recommended by several experts.
“The first business plan you write should be for nobody but yourself,” says Norm Bodsky in his book,
“Due Diligence.” “You just need to answer four questions as honestly as you can: 1) what is the concept? 2) How will you market it? 3) How much do you think it will cost to produce and deliver what you’re selling? And 4) what do you expect will happen when you start making sales?”
Bodsky says the main idea of this first plan is to spell out as clearly as possible how you think the business is going to work, and to test your assumptions before you try to raise money or present this plan to anyone else. This will help you keep mistakes and unrealistic expectations to a minimum.
Remember that any plan you eventually end up with is never really “final.” Business conditions are constantly changing, and new opportunities are always presenting themselves. Know that you can and should review and improve your plan to maximize its effectiveness as a guide for your business.
“Writing a plan allows you to see how changing parts of the plan increase profits or accomplish goals,” says McKeever in “How to Write a Business Plan.” “You can tinker with individual parts of your business with no cash outlay.”
That said, you will eventually want to write a full-blown plan. While we can’t provide a comprehensive description (there are whole books on the subject!), here are some steps that will help you through the process.
According to “The Instant Business Plan: Twelve Quick and Easy Steps to a Successful Business,” by Gustav Berle, Ph.D. and Paul Kirschner, the introduction contains three elements: the cover letter, the cover sheet and the table of contents.
If presenting to a banker, the letter should include the highlights of your introduction. The introduction should touch on the most important points of the plan, giving the reader an idea of what they are about to get into. Though it should be brief, this section is very important because you are molding the reader’s impression of your business.
This summary is also included at the beginning of the plan. “The first page of your plan should state your objectives as simply as possible,” says David H. Bangs, Jr. in “The Business Planning Guide.” “If the plan is for your sole use, the statement can be brief. However, if the plan is also to be used as a financing proposal, the statement becomes more complex.”
If you are preparing the plan for a banker, Berle and Kirschner suggest including in the summary a description of your business, the amount of your loan request, your payback plan and what security you offer for your loan.
The cover sheet simply says something to the effect of “1999 Business Plan for Joe’s Power Equipment” in block letters or headline format. If presenting it to a banker, include another sentence below, saying “Prepared especially for (lender’s name and name of institution).”
One of the most important factors of your business plan is to make it easy to use, so the table of contents is another important page. It will be referred to throughout the life of the plan. Organize it well, displaying every section of the plan with the corresponding page number. You will have sub-entries on the table of contents as well in certain sections that contain several key pages, such as your financial section.