Home > 2.c. Business Plan Skills > 1.1. Business Plan Basics

1.1. Business Plan Basics

January 14, 2010 Leave a comment Go to comments

Business Plan Basics

The best way to show bankers, venture capitalists, and angel
investors that you are worthy of financial support is to show
them a great business plan. Make sure that your plan is clear,
focused and realistic. Then show them that you have the tools,
talent and team to make it happen. Your business plan is like
your calling card, it will get you in the door where you’ll have
to convince investors and loan officers that you can put your
plan into action.

Once you have raised the money to start or expand your business,
your plan will serve as a road map for your business. It is not
a static document that you write once and put away. You will
reference it often, making sure you stay focused and on track,
and meet milestones. It will change and develop as your business
evolves.

Do I need a business plan?

Not everyone who starts and runs a business begins with a
business plan, but it certainly helps to have one. If you are
seeking funding from a venture capitalist, you will certainly
need a comprehensive business plan that is well thought out and
contains sound business reasoning.

If you are approaching a banker for a loan for a start-up
business, your loan officer may suggest a Small Business
Administration (SBA) loan, which will require a business plan. If
you have an existing business and are approaching a bank for
capital to expand the business, they often will not require a
business plan, but they may look more favorably on your
application if you have one.

Reasons for writing a business plan include:

  • Support a loan application
  • Raise equity funding
  • Define and fix objectives and programs to achieve those
    objectives
  • Create regular business review and course correction
  • Define a new business
  • Define agreements between partners
  • Set a value on a business for sale or legal purposes
  • Evaluate a new product line, promotion, or expansion

What’s in a business plan?

A business plan should prove that your business will generate
enough revenue to cover your expenses and make a satisfactory
return for bankers or investors.

  1. Executive Summary–features the highlights of your plan and
    sells your idea in two pages or less.
  2. Company Summary–a factual description of your company,
    ownership, and history.
  3. Products (or Services or both)–describes your products
    and/or services and how they stand out from competitive products
    and services.
  4. Market Analysis-provides a summary of your typical customers,
    competitive landscape, market size, and expected market
    growth.
  5. Strategy and Implementation-describes how you will sell your
    product, how you will put your plan into action, and establishes
    milestones.
  6. Management Summary-provides background on the management
    team, their experiences, and key accomplishments.
  7. Financial Plan-contains key financials including sales, cash
    flow, and profits.

What makes a successful business plan?

  • A well thought out idea
  • Clear and concise writing
  • A clear and logical structure
  • Illustrates management’s ability to make the business a
    success
  • Shows profitability

How do you write a business plan?

Sitting down looking at a blank computer screen as you prepare to
start your business plan can be daunting. You may want to look
at some alternatives that will make the process a bit easier.

Use Business Planning Software

A good business planning software package will provide you with
an outline for a well-developed, objective-based and professional
business plan. Software packages will remove the problem of
starting from scratch by structuring your plan for you. The
software should ask you the right questions that will pull out
the most important underlying concepts within your business idea.
Find out more about the leading software package on the market, Business Plan Pro.

Buy a Book

There are many good books on the market that will help you to
understand what needs to go into a good business plan. You can
read Tim Berry’s newest book, “The Plan-As-You-Go Business Plan“.

Sample Business Plans

Bplans.com has 100+ free sample plans to help guide you through your “writers block”. The sample plans available are in all types of categories from construction to retail, consulting to online businesses.

Hire a Professional

A professional consultant will create the business plan for you,
but you still have to be prepared to think through your business
and understand the underlying concepts in your business idea.
You will have to work closely with the consultant to ensure that
he or she develops a good plan that accurately represents your
business or business idea.

Business planning resources

Business Plan Pro

Here are some of Palo Alto Software’s business planning resources:

  • Business Plan Pro – Create professional business plans in hours, not weeks. Step by step quidance and instant downloads available.
  • Marketing Plan Pro – Detailed marketing plans are essential to any business. Create yours today with Marketing Plan Pro!.
  • Sample Business Plans – Browse 500+ sample business plans. Each sample plan is included in Business Plan Pro.
  • Business Planning Books – Read books on creating a business plan, and keeping that plan alive. Included is Tim Berry’s newest book “The Plan-As-You-Go Business Plan” and others.

Source: bplans.com

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