By Jonathan Croswell
How to Make a Business Plan
Successful business development begins with writing a good, clear business plan for potential investors.
By Jonathan Croswell
OverviewA business plan is essential if you’re looking to start a business and need private investors or financial support from the bank. Any entity considering loaning money will want to see as detailed a plan as you can possibly make, which includes long- and short-term planning, market analysis, and cost and revenue projections. A business plan forces you to not only have an idea, but to prove its viability and value as an investment for both yourself and others. Business plans are written in a pragmatic, straightforward style and are meant to present hard facts.Step 1Strip the purpose and goal of your business down into the simplest terms possible and write an executive summary. This will introduce the reader to what your business is and the role you expect it to perform. Briefly cover its operations, sales projections, employees required, current financial restrictions faced and the purpose of your business plan.Step 2Write a “Description of the Business” in which you give an in-depth explanation of the services or products your business will provide. Also mention any characteristics of this business that separate it from similar businesses. Templates such as the ones found on SamplePlan.com can give you an idea of the tone of this section and the focus it should have.Step 3Present market research and market analysis. This includes discussing the size of the industry and illustrating how your business can fill an industry gap. Chart the potential of your business to thrive in this industry, as well as the potential growth of the industry itself, if applicable. Some corporations spend millions on market research, but you could get by spending thousands or less depending on the research you want to include. Solicit the help of a local college’s business class if you don’t have money to spare.Step 4Describe the personnel organizational structure. This includes the chain of command, every employable position you expect to fill and the salaries expected.Step 5Discuss your financial situation. Lay out the money you currently have versus the money you need, and reveal how you expect revenue and sales to go in the first few years. If you need financial assistance, provide a plan through which you can easily manage timely repayment with interest. Most companies do not break even for an average of three to five years, so if this is an entrepreneurial venture, explain how you expect to finance your own living before the break-even point.Step 6Provide supporting documents at the end, such as permits already received for business operations, lines of credit secured, property agreements, letters of recommendation or support from influential individuals or businesses, and vendor price quotes, if applicable.skill4tipSecure smaller financial investments and lines of credit first to show faith of investment to more prominent financial suitors.tipsSecure smaller financial investments and lines of credit first to show faith of investment to more prominent financial suitors.warningDo not start a company unless you think you can last five years without receiving any profit from it.warningsDo not start a company unless you think you can last five years without receiving any profit from it.keywordbusiness plan model entrepreneur investmentkeywordsbusinesskeywordsplankeywordsmodelkeywordsentrepreneurkeywordsinvestmentResourcesreferenceYale.edu: VenturesreferenceGrowThink.comresourceSamplePlan.com: Description of Business Plan
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