Writing a business plan can be a challenging and time consuming task. However, the business plan process can be more affective and completed faster by following a number of key steps.
The first step is to identify the uses for the business plan, either for internal or external purposes. For internal purposes, a business plan can be used as a planning tool to help management plan for growth and industry changes. The business plan can be updated on a yearly basis to ensure its relevance. Even though business plans can be very useful as a management tool, they are more often used for external purposes. External users of business plans include lenders, investors, buyers, and partners such as customers and distributors.
The second step is to outline the structure of the business plan. Once the outline is defined, it would be easier to start working on specific areas. The executive summary should be completed last since it should be a summary of the most important points on the business plan. After outlining the structure, the third step is to create a data gathering list of documents and information that will be necessary to write the business plan. Some of this information includes a marketing plan, financial forecast and management bios. Once all the information is gathered, the fourth step is to perform market and industry research. There are several sources of market research information including local libraries, university libraries offered to alumni, government sources, and business sources offered at a fee. After completing market and industry research, it is important that the financial forecast represents feasible projections. For instance, it would be difficult for an investor or a lender to accept financial estimates that represent gaining 50% of the market share during the next five years.
The last step is to complete the executive summary which should include the most important information the reader should know. This summary is generally two or three pages long and should be supported by the rest of the business plan. Following these steps would not only shorten the business plan writing process but would also result in a more coherent business plan. A well written business plan can help make a good first impression to a potential investor, lender, or business partner.
The first step is to identify the uses for the business plan, either for internal or external purposes. For internal purposes, a business plan can be used as a planning tool to help management plan for growth and industry changes. The business plan can be updated on a yearly basis to ensure its relevance. Even though business plans can be very useful as a management tool, they are more often used for external purposes. External users of business plans include lenders, investors, buyers, and partners such as customers and distributors.
The second step is to outline the structure of the business plan. Once the outline is defined, it would be easier to start working on specific areas. The executive summary should be completed last since it should be a summary of the most important points on the business plan. After outlining the structure, the third step is to create a data gathering list of documents and information that will be necessary to write the business plan. Some of this information includes a marketing plan, financial forecast and management bios. Once all the information is gathered, the fourth step is to perform market and industry research. There are several sources of market research information including local libraries, university libraries offered to alumni, government sources, and business sources offered at a fee. After completing market and industry research, it is important that the financial forecast represents feasible projections. For instance, it would be difficult for an investor or a lender to accept financial estimates that represent gaining 50% of the market share during the next five years.
The last step is to complete the executive summary which should include the most important information the reader should know. This summary is generally two or three pages long and should be supported by the rest of the business plan. Following these steps would not only shorten the business plan writing process but would also result in a more coherent business plan. A well written business plan can help make a good first impression to a potential investor, lender, or business partner.
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