The prospect of having to draft a business plan can strike fear into even seasoned professionals. There’s more to consider here than just your business, your future goals, and the layout of the plan itself. There’s the thorough research and the number crunching involved as well. The long list of considerations is enough to make a sensible person want to postpone business plan preparation for as long as possible.
Composing a business plan will help to crystallize your thinking. It may also boost your confidence. Business plans are a bit like road maps. When you’re planning a long car trip, checking the map and evaluating your options about things like making good time, saving gasoline and seeing a few of the sights can hone and refine your thinking. You’ll start to ruminate on a hundred details you’ve never considered before. That’s a good thing.
If you’re about to embark on the task of compiling a business plan:
Small Business Plan Tips and Suggestions
Focus – A business plan can help you on a number of levels. Think of it as your formal business strategy. It should capture the interest of potential investors by showing them that you’ve run the numbers. It should also show that you understand your industry and have a clear idea of what distinguishes your business from all the others out there. Although a business plan is a vehicle that helps market your business, it doesn’t contain any fluff or padding. It’s a document that contains detailed and specific information. A good rule of thumb is that your business plan should read more like a textbook than a brochure.
Use a conventional format – There are a number of free online formats you can employ to outline your business plan. The key here is to use a straightforward approach. You may be in a creative business, but it pays to assemble your business plan using a predictable structure. Commonly used sections in a business plan include:
- Cover page
- Table of contents
- Executive summary
- Company information
- Product offerings (or services)
- Industry information and facts about the competition
- Ownership and management data
- Marketing plan
- Operating plan
- Financial statements and projections
Avoid exaggeration – It’s important to make a business plan sound interesting and compelling, but too many superlatives will weaken instead of strengthen your assertions.
Avoid complex nomenclature – It may be necessary for you to explain some complex technical terms to make others understand your industry or products, but direct your remarks to a lay audience whenever possible, and define difficult concepts in simple language.
Make it accurate – There are few things worse than being tagged for using inaccurate information when compiling a business plan. Check your facts twice — and then check them again. If you’re not a financial wiz, consider having the financial section prepared by a pro.