Writing a Business Plan: A Step by Step Guide (Part I)

Entrepreneurs and small- to  mid-sized business owners are constantly admonished that they need to develop a "good" business plan.  While this is indeed a good idea, most entrepreneurs and business owners have little or no idea how to do so.  While it is advisable to retain the service of an expert, the truth is that anyone willing to put in the time and effort can write a "good" business plan. This multi-part series provides the basics of a business plan to guide you in the process.  We start with fundamentals, such as defining what a business plan is.  In later parts, we'll explore how to research the information necessary to write the business plan; how to perform basic market research; how to make sales projections; how to perform a SWOT analysis; we'll look at some software resources and end with other sources of assistance.  So buckle your seat belt and get ready for a ride.   1. What is a Business Plan? There are many definition of the term.  In fact, if you Google "Definition of business plan", you'll get 95,900,000 hits (all in 0.25 seconds!!!).  A valid, if not valuable, definition is that a business plan is: "a document which summarizes and describes the operational and financial objectives of a business, and containing detailed plans and financial projections demonstrating how those objectives will be achieved."  Perhaps a more useful, if not succinct, definition might be: "A road map to take you from here to there by the safest, fastest, most profitable route." A good business plan tells a compelling story and explains: <ul> <li>Who you are</li> <li>What your business does and how it does it</li> <li>Where you are located</li> <li>How you will generate revenues and profits, and how much of each</li> <li>Who your customers are and where they are located</li> <li>What your business does better than anyone else</li> </ul> 2. Who Should Write a Business Plan? Simple...everyone!!! It is often said that those who fail to plan, plan to fail.  While perhaps a tired cliche, it is nonetheless true.  No doubt you can achieve financial success without a business plan.  However, the route may be longer and more dangerous than it ought to be.  After all, if you wanted to drive from Seattle to Taos, you would surely look at a map and plan your route.  In fact, you would have to make certain choices since there are a number of ways to get there.  You could take the scenic route, or the fastest route, or the one with the least amount of tolls; or ... well, you get the idea.  No different for your business.  A good business plan will force you to look closely at your ideas and make decisions.  Moreover, just like on a road trip to an unknown destination, if you don't know where you're going, you'll never know when you've reached your destination. 3. How Do I Start Writing My Business Plan? First, understand that writing a business plan is a process which involves time (lots of it), thought, research and frustration (again, lots of it).  It can be, and will be, quite frustrating as the process will often require you to go back and re-examine what you've already written.  Indeed, some times, it will require that you re-examine the very fundamentals of your business.  It can also be, and will be, very frustrating when the information you need and seek is unavailable, or is available from multiple sources in multiple formats and you have to make sense of it all.  It also often requires multiple phone calls and emails to request information.  Sometimes these requests are read by people eager to please.  Other times, not so much. 4. What Is Included in a Business Plan? While there are many formats to a business plan, they all should include the following sections: <ul> <li>Cover Page</li> <li>Table of Contents</li> <li>Executive Summary (written last)</li> <li>Business Description</li> <li>Mission and Vision</li> <li>Market Definition</li> <li>Description of Products and/or Services</li> <li>Organization and Management</li> <li>Exit Strategy</li> <li>Financial Analysis and Management (including a SWOT analysis)</li> <li>Attachments</li> </ul> Each of these sections contains sub-sections which we will explore in greater detail in later installments of this series.  However, remember that a business plan should tell a compelling story about your business, explaining what, who, where, why, when, and how.  A good business plan should be focused, clear and consistent, while defining specific and measurable objectives.  Finally, a good business plan is never written in stone is should be updated frequently.   2008-12-30T05:55:18Z

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writing-a-business-plan-a-step-by-step-guide-part-i

2008-12-30T08:04:01Z

Those who fail to plan, plan to fail! While it is advisable to retain an expert to write your business plan, anyone willing to put in the work and effort can write one. This multi-part series provides a step-by-step guide.

Writing a Business Plan: A Step by Step Guide (Part I)

2009-02-24T09:48:08Z