How To Write A Business Plan
How to Write a Business Plan contains detailed forms and step-by-step instructions designed to help you prepare a well- thought-out, well-organized plan. Coupled with your positive energy and will to succeed, you’ll be able to design a business plan and loan package that you will be proud to show to the loan officer at your bank, the Small Business Administration, or your Uncle Harry.
Writing a plan is a journey through the mind of one person. Even in partnerships and corporations, usually, one person has the vision and energy to take an idea and turn it into a business by writing a business plan. For that reason, I have addressed this book to the business owner as a single individual rather than a husband-and-wife team, group, committee, partnership, or corporation. And you’ll find that the same financial and analytical tools necessary to convince potential lenders and investors that your business idea is sound can also help you decide whether your idea is the right business for you.
What Kind of Plan Do You Need?
You can use How to Write a Business Plan to write whatever type of plan best suits your needs:
• Complete business plan
A complete business plan is especially helpful for people who are starting a new business. This form of plan is also excellent for convincing prospective backers to support your business. You’ll be more successful in raising the money you need if you answer all of your potential backers’ questions.
A complete plan should include the following elements: Title Page, Plan Summary, Table of Contents, Problem Statement, Business Description, Business Accomplishments, Marketing Plan, Sales Revenue Forecast, Profit and Loss Forecast, Capital Spending Plan, Cash Flow Forecast, Future Trends, Risks Facing Your Business, Personnel Plan, Business Personality, Staffing Schedule, Job Descriptions, Specific Business Goals, Personal Financial Statement, Personal Background, Appendix, and Supporting Documents.
• Quick plan (one-day plan)
If you know your business, are familiar with and able to make financial projections, and have done the necessary research, you may be able to create a plan in one day. But understand that a quick plan is a stripped-down version of a business plan. It won’t convince either you or your prospective backers that your business idea is sound. It is appropriate only if your business idea is very simple or someone has already committed to backing your venture.
A stripped-down quick plan has these few components: Title Page, Plan Summary, Table of Contents, Problem Statement, Business Description, Business Accomplishments, Sales Revenue Forecast, Profit and Loss Forecast, Capital Spending Plan, Cash Flow Forecast, Appendix, and Supporting Documents.
• Customized plan
You can start with a quick plan and add components from the complete business plan to suit your needs. When deciding what to include and what to exclude, ask yourself:
■ Which of my statements are the strongest?
■ Which statements do my backers want to see?
In an effort to make sense of the thousands of types of small businesses, I have roughly divided them into five main ones: retail, wholesale, service, manufacturing, and project development. All the financial tools I present can be used by all five. However, for the sake of simplicity, I follow one particular retail business—a dress shop. In so doing, I illustrate most of the planning concepts and techniques necessary to understand and raise money for any business.
As you read through the text you’ll meet Antoinette Gorzak, a friend of mine. Antoinette wants to open a dress shop, and she has allowed me to use her plans and thought processes as an example of a complete and well-prepared business plan for a retail store. You’ll find parts of her plan presented in different chapters as we discuss the various components of a complete business plan.
Before you sit down to write your plan, you’ll want to gather together these essentials:
- a word processor
- a calculator or computer spreadsheet program
- a good supply of 8 V 2 ” by 11″ paper
- several pencils and a good eraser, and
- access to a photocopy machine.
Now, here’s a word about revisions and changing your plan. I firmly believe in writing your first thoughts on paper and letting them rest for a day or two. Then you can edit, expand, and revise later to get a more perfect statement. In this book, I show examples of Antoinette’s writing process. (I’m grateful she’s such a good sport.)
Most people discover about halfway through writing their plan that they want to change either their assumptions or some of the plan they’ve already written. My best advice is this: Complete the plan all the way through on your original set of assumptions. That way you can see the financial impact of your ideas, and it will be much easier to make the right changes in the second draft. If you start revising individual parts of the plan before you have the complete picture, you’ll waste a lot of energy. If you’re like me, you’ll rewrite and edit your plan several times once you’ve finished the first run through.