Writing a business plan is possibly the most important thing you will do when you start a new business. Your business plan is the backbone, the bible, the guiding light of your Start-Up. This is the document you will refer to every time you must make an important business decision to make sure that you on track with your ultimate purpose. It stands to reason that it needs to be simple, solid, and surprisingly, flexible too.
Your business plan is also the document you are going to present to potential investors when you want to get their support. So, it needs to be not only user friendly, but also elegant and compelling.
But how do you do it? No matter what kind of business you are starting there are certain elements that are essential to your business plan. We have highlighted them below.
The Basic Rules of Writing a Business Plan
Write for the Reader
You are writing your business plan to be read. So, the first thing to do is think about who is going to be reading it. You want to give them all the relevant information that they need, without wasting their time. The people you are most likely writing for are investors and employees. They will need specific information from you. They are also busy people – keep the business plan succinct.
Start by Summing Up
One of the biggest mistakes people make with business plans is to assume that the reader understands what the business is about. Avoid this by writing a single sentence to sum up your business and make sure you put it right there in the introduction. The last thing you want is for an investor to get to the end of your document and still be unsure of what you are selling them.
Keep it Short and To the Point
You can elaborate on the finer details of things in individual documents that are specifically for each segment of your business. Your business plan is an overview. Only add elaborate detail where necessary.
Sell, Don’t Gush
Essentially you want to sell but not over sell through your business plan. It should get the reader excited and wanting to know more. You have to let your concept stand for itself. Don’t be tempted to use superlatives like “the best”, “world class”, “amazing”, “very”, etc. They simply detract from your original statement and usually get the reader questioning the validity of your claim. Let them come to the superlatives by themselves. The only time it’s okay to use these kinds of extremes is if you have hard facts to support them, for example, if you have won a first prize in a contest that proves you to be the best, or if you have statistics that back you up.
What to Include in your Business Plan
The Elevator Pitch
Like your single sentence description, the elevator pitch is short and direct. It clearly articulates to others who you are (as a business), what you do and why you do it. The elevator pitch is part of your strategic plan, it’s essential to your success and it needs to be updated regularly. Remember this is what your employees are going to tell the world about your business, so it needs to be sharp.
This is a summary of your niche market and how you relate to them, why they will respond to you and what makes you unique in the market.
Why your business exists, with specific focus on how you will benefit your customer, the market and society.
Vision and Goal Projections
Map out your vision and projections for the first three to five years. Show the reader what your business should look like within six months, a year, three years and five years. This is where you can break your end goal up into achievable “bite-sized” portions which lead strategically from one to the next.
Key Performance Indicators (KPIs)
Your KPI’s are strongly linked to your goals. These are the markers you set to assess whether you are achieving your business goals in line with your strategy and timing plan. It’s critical to identify your KPIs. They are not all going to be as simple as “total sales” although that should be one of them.
KPIs can be anything that affects sales and helps to measure the impact you are making with your brand. They can include things like website traffic, the number of visitors who submit a contact form, Leads generated and other meaningful interactions. These are all measures that you will watch closely to ensure that your business plan is on track.
Strategies and Plans
How you plan to achieve your KPIs and the timeframe you intend to do this in. This should include roughly five sentences on the methodology you intend to implement to build and manage the growth of your business. Then you can highlight the action plan to implement your strategy.
(Strengths, Weaknesses, Opportunities and Threats) It’s essential to know what these are and include them in your business plan. This will highlight the best opportunities for your growth. It gives confidence to your investors to know that you will not only develop your strengths but also improve your areas of weakness.
The final thing on your business plan is the executive summary. It is a simple summation of each area of your plan. It should be short and sweet. You want to give a sense of solidity and confidence in your plan rather than rehash every detail you have just covered.
Once you have these aspects in place you are ready to write your business plan. Don’t worry if you don’t have it down perfectly on the first attempt. Start by writing down each of the headings above on a piece of paper (or in a new word document) then start putting ideas under each heading. You want to get down “the bones” of your plan in a sort of fact sheet. Once you have written down all of your details it’s time to flesh them out and rework them until you have a tailored business plan. Always get someone with a good grasp of both business and language to proof read your plan before you present it to anyone official.