How to Write a Business Plan
The most important thing you can do for your business is to write a business plan so you know how you are going to pull it all off. You may have it all in your head, which is a good start, but for a strong finish, you must have a business plan.
- Struggling Entrepreneurs don’t have business plans; Affluent Entrepreneurs do.
- Struggling Entrepreneurs are broke; Affluent Entrepreneurs are prosperous
A business plan may come in many forms and doesn’t need to be 30-40 pages. It can be as short as 10-15 pages. A major reason for your business plan is that you may need to raise seed money for your business, and investors will be more apt to give you money if they can see that you went through the process of writing a business plan.
I have written many, many business plans over the years. The first was for an entrepreneurship class in college for Dr. Paul Larsen at the University of Montana. This process was without a question absolutely the most important experience I had at UM. It was here that I placed third as an undergraduate in an MBA graduate business plan competition (very good, considering I was an undergraduate studying political science.)
There are many variations and components of a strong business plan. The style or formation you use does not really matter; what matters is that you actually create one and then follow it as you launch your venture.
A detailed business plan needs to include the following:
- Executive Summary: An Executive Summary is a one-page complete overview of your business model, proving that a need exists in the marketplace for your product or service. It also lists the owners/management team for your venture, offering their experience in your venture’s industry. This page also gives a quick overview of the sales and marketing plan and finally a brief listing of competition and a implementation schedule.
- Mission Statement: A Mission Statement is typically two to three paragraphs that describe why you are launching your business and what you hope to accomplish. Typically, here you would describe the level of experience you desire to give to your customer from your service and the benefits your customers will receive as a result of using your product.
- People sometimes think that a Vision Statement is the same as a Mission Statement, but there is definitely a difference. A Vision Statement is typically a one-page overview of what your company will look like 3-5 or maybe even 10 years down the road, including where your company will stand among its competition, its annual revenues, and the qualities of the products and services offered.
- The Current Problem: The Current Problem is a detailed analysis of the market conditions as a result of performing due diligence, interviewing customers of the product or services, and interviewing other companies in the industry. This process is all about doing whatever you can to identify the problems in the current marketplace.
- Your Solution: Your solution is your company’s overall solution and strategies to fix, solve, or improve the level of service that existing customers in the industry are experiencing. It is about providing a better, more enjoyable experience for the customer.
- The Sales Strategy: The Sales Strategy is about the model you intend to use to market your company’s product or service. For example,
- Are you going to hire direct salaried employees to fill out your sales team?
- Are you going to go with some type of commission-based incentives for your representatives?
- Are you going to position your company using a direct sales model?
- Are you going to rely on referral selling or joint ventures?
- Who will be the people responsible for driving revenue to your bottom line?
- The Marketing Strategy: The Marketing Strategy is all about how you are going to brand your product in the marketplace to determine the exact methods for launching your product or service. Are you going to spend money on advertising or implement more cost-effectives marketing strategies?
- Profit and Loss Cash Flow Analysis: Profit and Loss Cash Flow Analysis is about determining what your company’s actual cash flow needs are and how profits and revenues will be reinvested into the company. Part of this process is determining how much you as the owner draw out of the business as the owner and CEO.
- The Competition: The Competition is about performing analysis of the strengths and weaknesses of your competitors to determine how your business can do a better job in service and pricing, as well as showing how your product or service is superior to your competitor’s.
- The Challenges: The Challenges is all about determining which market forces are working against you, including overhead and operating expenses. Other challenges may include attracting seed money or investors to give you enough funding to ensure your success.
- Implementation Schedule: The Implementation Schedule determines the timetable in which you launch your business model, bring in revenues, and determine what additional resources are purchased to reinvest in your business.
- Key Points to Ensure Success: The Key Points to Ensure Success may be the most important part of the process, which will determine exactly what you need to ensure so no matter what the market conditions are, your business is a success.
As you can see, there are many components to writing a successful business plan. But most important, writing a business plan is the best way to give your company a shot at succeeding. Too many businesses fail, and when you get right down to determining the reasons for these failures, you will see that often many of them never took the time to actually write a business plan.
This is an excerpt from my book: “The Affluent Entrepreneur”
As a Motivational Keynote Speaker, I can speak on this subject or adapt my subject to your audience.