Writing A Business Plan

On the other hand, if your plan primarily will be used for your own information, if you don’t need to raise money then it is not as important to make a sales pitch or slick presentation. However, don’t skimp when it comes to doing your numbers. The last thing you want is to experience the very real misery of starting a business that never had a chance to make a solid profit.

It also is important to plan to get the help you need. Not all businesspeople are great writers. However, excellent writing skills can be a huge help in creating a compelling business plan. Consider paying a freelance writer with small-business savvy to help you polish your plan. Similarly, if numbers challenge you, find a bookkeeper or accountant to provide needed help.

Description & Analysis

The first several stages of your plan should describe your business idea and why it will work. If you will show your plan to potential lenders, investors or people you want to work with, show them that you have hit upon a product or service that customers really want. For example, show the rise in service-related spending over the past five years. Or, provide numbers describing the growth of the indoor tanning industry over the past couple of years. In addition, In order to show investors you are the right person to make this business work, include the following:

• A statement of the purpose of your business.
• A detailed description of how the business will work.
• An analysis of your market.
• An analysis of your competitors.
• A description of your marketing strategy.
• A resume setting forth your business accomplishments.

Again, depending on how you intend to use your business plan, you may be able to skip some of these elements. For example, if you don’t need to raise start-up money and are writing a plan mostly for your own use, you may decide to skip the resume of your own business accomplishments. However, twice before leaving too much out. Any new business will need to introduce itself to suppliers, contractors, employees and key customers. Showing them a part or your entire business plan can be a great way to do just that.

Making Financial Projections

Besides describing how your business will work, including how it will reach all of its new customers and fend off competitors, you also will need to do some number crunching to show that it will in fact turn a profit. All the rosy predictions in the world will not make your business a success if the numbers turn up red. Projecting the finances of your business may seem intimidating or difficult; however, in the reality it is not terribly complex. Basically, it consists of making educated guesses as to how much money you will need to sped and how you will take in. You then use these estimations to calculate whether your business will be sufficiently profitable.

Needless to say, predicting and planning the finances of your business is an important task, not just to attract investors, but also to demonstrate your business idea will be successful. If your first projections show your business losing money, you will have an opportunity while still in the planning stages to make sensible adjustments such as raising your prices or cutting costs. If you neglect to make tight financial projections, you won’t realize your plan is a money loser until you actually start losing money—at this point it may be too late.