1. How to write a business plan – Introduction
In this post I will be discussing how to write a business plan. I will be approaching this in the same way as when I coach business owners, without jargon. Focus on what is important, focus on results and make sure you take action to achieve those results. That means not much jargon, little focus on academic techniques, but lots of focus what usually matters to entrepreneurs. If I was teaching students (which I do) it would be different, since then you are trying to educate and provide a broad understanding of techniques, methods, jargon etc.
You can get further guidance on how to write a business plan and a free business planning template at this post FREE Business Plan Template or by using the form below. Even if you use the form, the post is still very useful to help you through writing a business plan systematically. The template follows a more “conventional” route, and also has some additional suggestions.
2. The really important questions to ask
When you run a business, how to write a business plan is less important than being able to answer questions like:
• How much money can I make?
• What profit do I want to make ($)?
• How much sales do I need to make ($)?
• What will I sell?
• Who will I sell to?
• What will it all cost?
If you can answer these questions with confidence and you currently are making or will make a reasonable profit, then you probably have a plan that will work. The fact that you have not addressed every component of a business plan as recommended by advisers are probably not that important. You can find a free business plan template here (which follows the conventional route) So, that’s how to write a business plan – by answering the most important questions and writing it down.
3. Who are you writing it for?
How to write a business plan? For yourself first, and then for others. Who is the intended target of your business plan? Is it yourself only, or do you have a partner who you will be discussing it with? Is it for potential investors, shareholders or partners? In this case make sure you comply with all legal regulations. A business plan for investors or shareholders could be regarded as a prospectus which has huge legal implications, potential liabilities and fines. Are you writing the plan for the bank or some other lender? Regardless of who you write for, you need to make sure you know what their needs are and how you will meet those needs.
4. How to write a business plan – first considerations
First, reflect on some key issues – dreams, sales, profit, customers, management and what actions are most critical to success. Do it quickly, and then start to write your plan.
1. Start with the dreams you have for your business. Call it Vision if you like, but remember it is often more important to visualize the steps that is required to achieve your dreams rather than the final results. Focusing on steps – even over many years – will ensure that you focus on the actions that will eventually get you there. You could start with the more immediate goals.
2. Start with deciding how much profit you want to make this year. Why? You need to get clarity about how much you want. What are you aiming for? Please note. Items 3 and 4 below should be done together. It is a bit of a chicken and egg situation.
3. Write down how you will market and sell your product. Firstly, who will your sell to? Who is your target market(s). Second why will they buy from your?
4. Write down what you will sell. What products and services do your customers need? You can call them “the market”, but never lose sight that you are selling to people who often think and reason very much like you.
5. Write down who is going to manage it and who is going to do the work.
6. Write down 5 key activities which, if done well, will have the most impact on your success.
At this point you should have a gut-feel understanding of your business and how to write a business plan. Based on the above you should be confident that every aspect is well in hand. If you have a feeling of discomfort and worry, listen to that and try to dispel it when doing a detailed plan. You can use the FREE Business Plan Template (Scroll to the top to request it now).
Never start if you are not confident that you can make a profit.