Writing a business plan is not a simple task … nor does it need to be a painful one either.

For starters, if this is your first attempt, you should look for Govt. and Non Govt. resources for small businesses and entrepreneurs ….. like your local chamber of commerce.

For online resources LinkedIn is a good start. Also try advisorgarage, gobignetwork, and similar networks to find a business consultant ready for pro-bono work.

The last thing you want to do though is to buy a software for business planning purposes unless you need this business plan simply for the sake of having a business plan on the shelf.

The better approach is: you should write a rough draft of your idea and everything what you think about it. Bounce these ideas at others and gather unique perspectives, feedback and more ideas, document that too. Lay out your monthly fixed costs ( rent, wages etc) along side your variable costs and then compare it with your prospective income sources. Run this schedule for at least 24 months. Use this schedule to see how much money you can go down for before the business works. Do you walk away 5 grand down after 6 months, or do you get lumbered with a hard to sell, expensive to keep, lease? Figure out, what happens if you reduce your income. Do a break even analysis – what is the lowest level at which you can make it work. Try to write something why …. and how sure are you that you will do better than anyone else who is doing the same. If you’re the only one doing or planning to do this the chances are either the idea is not profitable …. or even you don’t know where and who is doing it? So do more research about the business and try to figure the realistic bottom line for the business. All this analysis and work above was for your use. If you still want to do it –

Then draft a business plan using the free resources like Microsoft template and many more available in the market – this draft initially should include what you have done that makes you sure this will work. This may simply be – I have a contract, I know the business, there will be more, or it may be a thorough market research, traffic counts, industry statistics and the like. Put the schedule we did in the first place, into a spreadsheet,and lay out the rest in whichever format you like.

In my opinion, this is the most economic and realistic approach to write a business plan and not an off the shelf software which will give you a me-too business plan which to me is of no use as neither am I convinced nor can I convince any investors with that kind of auto-generated plan.

A business plan has many formats but shares a common group of elements. The one you write for yourself is different from one written to secure financing, or key employees. The place to start is not “which software to use” although that will be very helpful later.

You need to tell a story, or better yet, view it as a movie screenplay. If you can fill in the four elements below, you are well on your way to starting writing one.

The Title- The description of what your core idea is has to be compelling and not “just like all the others”. Why are you different?

The Star Studded Cast- Your Customers. Who is going to give you money? Why? Why Them?

The Thrilling Action-The plot details -Money In and Money Out- financiers love this part- but in simple terms, explain the money coming in and the money going out.

The Big Finish- Answer the question Why You Will Succeed? A good crisp answer here is the capstone.

I have seen plans go forward without these key elements explained simply and clearly, but the ones who do have a better shot at accomplishing their goals.

Business plans can be one of the most effective tools for the small business owner who is starting, growing and even managing a business. The business plan can have multiple uses and advantages. Provided is a list of important reasons to create a business plan:

• The business plan is simply a must have for small businesses
• Helps make important business decisions
• Offer a reality check
• Create new ideas
• Creates a plan of action

Writing an effective business plan is time consuming and enough time and thought should be given to successfully fund, manage and even successfully exit a business. To be successful and taken seriously by investors, your business plan must be clear, concise and must be able to describe what, where, how and why customers will want to buy from you.

Let’s get started by laying out the diagram of a successful business plan.

Executive Summary:

The executive summary will be a summary of the key points of the business plan.

Business Description:

Provide an overview about your business idea, concept/s, products and or services, etc.

Value Proposition

This section outlines what makes your business idea/concept/service novel (better than everyone else’s). This is not about price since you may have difficulty defending this to potential investors.

Industry Analysis

This section will describe what the industry looks like (an overview), trends, what do customers purchase, eat, look like, demographics, etc. The more details you provide the better.

Competition

Who are your competitors? What market share do they have? Even if there is no competition, provide competition that is close to your business.

Marketing Strategies

How will your products and or services go into the market place? You have to think about non-conventional marketing (Note: this is critical) methods that are cheaper than traditional marketing methods (E.g. T.V, radio, print) and have higher impact.

Barriers of Entry

What will stop you from entering the desired market? How will you overcome the barriers of entry? How will you set up your own barriers of entry for other potential entrants into the marketplace?

Distribution Channel

How will your products and or services be entered into the market?

Team Summary

This section often many times is the most important part of the business plan as potential investors want to see who else believes in your idea. Also, potential investors want to see the experience your team possesses in various areas of your business (E.g. technical, business, commercialization, etc.)

SWOT Analysis

SWOT = Strengths / Weaknesses / Opportunities / Threats SWOT deals with the conditions in which your products and or services operate. Strength and Weaknesses are internal (team, company, products/services) Opportunities and Threats are external (market place, trends)

Financial Analysis

All financial aspects of your products and or services.(cash flows, income statements, balance sheet, start up income required). Note: spend plenty of time here. You must be able to justify any assumptions

Critical Success Factors

What needs to be achieved that will enhance your chances of success? Also, insert the possibilities of the chances for success happening.

Exit strategies

Describe how you and you investor, if any, will exit out of the project if you want to and make an excellent return or move on to your new “BIG” idea.

Future Developments

This section describes any future plans for your products and or services.

Appendix

Add any additional information here (Quotes, contracts, statistics, etc.)

There are many different idea and practices in writing a business plan. It does seem like a daunting task but it does not have to be. There are many online resources at your disposal including the U.S. Small Business Administration that will help you to get started or you can use business plan software that will guide you step by step in your endeavor. It will also be good idea to have an accountant help with the financials. It can cost you an up front cost but the benefits outweigh the up front cost accrued. Armed with this information, you are now ready to get started writing your new business plan. Good luck and be prosperous in your new endeavors.

Writing a business plan is not an easy task. It’s a way to provide the perfect blueprint of a venture and the first step for an entrepreneur when executing his or her initial idea. The business plan will not only serve as a pitch to potential investors, but also as a guide when trying to accomplish your milestones. Below you will find some tips that will shed some light on the process of drafting your business plan.

1.) Divide your plan into sections. A business plan should be very well structured and at the same time very easy to read, especially for people that don’t know what your company is about (e.g. investors, angel investors, venture capitals, etc.). Be sure to organize your plan by including a table of contents, executive summary (company ownership, location, etc.), market overview (market segmentation, industry analysis, competitors, etc.), strategy and implementation (competitive edge, marketing strategy, etc.), management summary (financial highlights, startup summary, etc.), revenue forecast, personnel forecast, projected profit and loss, break-even analysis, projected cash flow, projected balance sheet, sensitivity analysis, and an appendix.

2.) Get a second opinion. Once you have drafted the business plan it is important to have another pair of eyes review it. The reason for this is not only to correct possible mistakes, but also to get feedback on other possible routes that you were not aware of. The more people you have looking at it, the better. This will help you when you are looking for that missing piece of the puzzle.

3.) Be prepared to re-draft. Every business plan changes several times. It is almost impossible to get it right on the first try, and if you do, there is a high possibility that it was done incorrectly. Once you share your business plan, be sure to ask for feedback because when you launch a product, your plan may need change based on the demand of clients and customers. Additionally, be sure to change your plan accordingly every few months, so that when it comes time to meet with investors, you know that they are looking with the most recent draft.

4.) Think like an investor. Always put yourself in the shoes of the investor. Make sure you always highlight the returns and competition that you will face when launching your venture. These are the top two factors that investors will be looking for. Try to include both sections in your executive summary so that investors can see it right off the bat. Some other factors that investors could potentially be interested in are: industry-leading gross profit margins, intellectual property rights, brand extension capabilities, customer contracts, recurring revenue potential, and partnerships with larger companies.

5.) Know your market. It is very important to know your market before starting anything. You need to know what you will need in order to build the structure. It is critical that you know what other companies are within the same field as you. Make a very clear difference between you and them and explain how you will be able to do things better and faster. Carefully explain how and where you intend to sell your product and how much it would cost you in order to get costumers rolling into your business. The value of a customer should be three or more times greater than the cost of acquiring a customer.

6.) Have the right profit margin calculations. Profit margins should be measured in percentages. The profit margin is the net income divided by revenue, or net profit divided by sales. It measures the amount of money a company makes: meaning every dollar that has been made out of sales. These margins are very useful when comparing your company with another one. A higher margin would mean that the company is more profitable and that there is a better control over the company’s cost. Make sure you are comparing averages with other companies within the same field. Identify if you are on the high or low terms compared to the industry’s performance.

7.) Know the risks. You should write in detail what the operating risks that your venture may be faced with in the future. You also need to be open to change and to other suggestions in order to gain such trust from investors. These investors love when you are open to new ideas, this will help in building a stronger relationship with you and your investor(s). We suggest that you write down the top risks that could damage your sales. In this stage, you have to have the willingness to learn, and to accept a different range of possibilities.

8.) Be very descriptive with your projections. As explained earlier, business plans should not be drafted only to be understood by you. Of course, you will be able to understand what your excel sheet is saying, but other potential investors will not have the time nor the interest to learn what your sheet is saying. Make sure you clearly explain in detail what you are saying, include introductions and descriptions that will help understand your numbers.

9.) Explain the use of proceeds. Every business plan should include how the money is intended to be spent. Make sure you allocate proceeds to the right resources and that the numbers are reasonable. Pay special attention to this section, otherwise the potential investors might feel like investing in your project will be the same as burning the money or throwing it in the trash. The details of the proceeds normally focus on product development, intellectual property filings, equipment acquisitions, debt repayment, and marketing.

10.) Establish clear milestones. This section might be one of the most important parts of the business plan. Be honest with yourself: is this something you can accomplish? In the event that investors decide to put money into your business you need to make sure that they are going to follow these milestones very closely. In the event you don’t reach them, difficult situations may arise for you, for them, and for other interested parties that may be turned off right away. Try to specify the management milestones as well. Separate your milestones from the your product milestones and make sure that both sections are clear and understandable.