Writing Business Plan Basics -
For A Good Plan and A Great Business
Your writing business plan basics. There are 2 important reasons why you should consider writing a business plan.
- The first is so you can convince a lender or a potential investor your business is worthy of investing in or lending money to.
- The second is to develop a good marketing plan.
Ok, so you will have to spend some time conducting research. You'll need to find out who your competition is, and how they are selling their products and/or marketing their services and business. This research will make writing a business plan much easier. When you've put everything together into your finished business plan, your business has a much greater chance of success.
That said, here's a simple approach.
Writing Business Plan - Using Free Business Plan Template
You can download a
free home based business plan template. Review it and begin by doing some simple research.
At the very least, your finished plan should include these basic elements.
- A Thorough Description of your Business - What you do, what products you sell
- Your Marketing Approach- How will you sell your Business,Products or Services
- Competition- Who is your competition?
- You Operating Procedures - Describe your approach to business
- Insurance- Make sure you are covered for liability
- Financial Information should include: A 3-Year Proforma (Projections of earnings and expenses), A Balance sheet, A List of Your Equipment,A Break-even Analysis
- Your Resume
Here's a
Complete Business Plan Outline. Your business plan should include all the elements necessary to show your potential lenders or investors you've done your homework.
Keep your reason for writing a business plan close in mind as you begin to compile your information and research data.
Are you writing a business plan to present to a banker?...
Or will you use it to raise startup money from an investor. If so, you'll want to create a compelling reason for someone to invest in you, your ideas and your business.
Bear in mind, they will also be looking for how much of your own time and money you have invested prior to seeking them out.
A banker will be looking at how this business is going to generate enough cash flow to pay back the money you are seeking. You are writing a business plan to sell him on you and your ability to
sell your products or services and make a profit. An investor is looking at how much money he'll be able to make in return for his investment.
As you work with your financials, make sure you project sales and profits, so you can show your potential investment partners (the banker, private investors,etc.) your cash flow. (Remember this: Cash flow and profits are two different
things.) Cash flow pays your expenses...profits are what's left over after you've paid your bills. Your banker will be looking at cash flow, investors will be looking for profits.
Be Thorough...Be Convincing...
And be sure you put some of your own money into the picture. You should consider at least 10%, but an investment of 25% is better. Remember, you are asking someone else
to take a risk on you. Ask yourself, why should they take such a risk, when you haven't...Think about it. They will.
Writing a business plan should be one of the first tasks you take on when starting your business. If you look at it as a way to discover more about your chosen business, you'll see it as fun and exciting.
You may find some surprises along the way, including opportunities you never considered before, ways to market, or even new products. Using a business plan template can ease your task.
