Business Plan Tips That Really Work
by David E. Gumpert
NetMarquee Online Services Inc.
Few assignments confronting entrepreneurs are tougher than that of writing a business plan. The assignment typically comes up when businesses must seek financing–and it must be completed quickly, and under pressure.
What follows is an outline of the key practical issues associated with developing a business plan–the length, the key sections, and the writing process.
What Is a Business Plan?
- A Good Definition: By answering this question, you get a handle on how to handle the tone and direction of your plan. Most fundamentally, a business plan is a document that convincingly demonstrates that your business can sell enough of its product or service to make a satisfactory profit and be attractive to potential backers.It’s a selling document that you write for potential backers.
How Long Should Your Business Plan Be? It depends on the type of plan you need to develop. There are three main types:
- Summary Business Plan:Typically Up to 10 Pages. Best for businesses in the following situations:
- seeking a bank loan
- lifestyle business
- to gauge potential investor interest
- Full Business Plan:10 to 40 Pages
- allows full exploration of key issues
- for businesses seeking substantial financing (over $500,000)
- to help in search for a strategic partner
- Operational Business Plan:40 + Pages
- for companies growing quickly
- should be developed as part of an annual planning process
What Your Business Plan Should Include and Cover:
- Cover Page
- Table of Contents
- Executive Summary
- The Company
- The Market
- The Product/Service
- Sales and Promotion
The Executive Summary:Your Guiding Light
You must capture your business in a maximum of two pages:
- is not an abstract
- should be the business plan “in miniature”
Company Strategy:What’s Your Identity?
- make your strategy believable
- put together a management team that can perform
- anticipate common management team problems
Marketing Issues:Who Are Your Buyers?
- first determine the benefits of your offering
- market research: keep it simple
- assess the competition
Product/Service Issues:What Are You Selling?
- figure out the “bells and whistles” you will offer
- make sure you can deliver!
- determine who will provide the on-going customer service
Sales and Promotion:How Will You Sell?
- figure out your selling approach
- determine how you will motivate your sales people
- consider carefully how you will promote your offerings
- compile “love letters” and other evidence of your products’ value
Financial Issues:How Are You Doing?
- talk with experts about what you should cover
- spend the most time on your cash flow forecasts
Targeting the Plan:
- target your plan by the audience it will serve (i.e. venture capitalists, individual investors, bankers, strategic alliance partners, etc.): “different strokes for different folks”
- set your priorities carefully
- use the document you write to support your goals for the business
- put one person in charge
- designate an outside “editor”
- seek out people who can review and comment
- rewrite, rewrite, rewrite
Now It’s Your Turn!
Follow these steps to begin writing your business plan:
- List your company’s three most important goals for the next two years.
- Describe how you will achieve those goals–via your strategy–in five sentences or less.
- List your service’s three principal customer benefits.
- Identify your top two competitors and explain the primary strengths and weaknesses of each.