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Business Plans 101

Writing a business plan from scratch can be a daunting task, particularly if you hate to write and haven't written anything more formal than an e-mail message since high school.

Even if someone else were to write your business plan for you, you'd have to answer two fundamental questions:

      •  What is the business you plan to launch?

      •  How will you go about doing this?

Answering these questions completes most of the work for drawing up a plan. The rest is just fleshing out the what and the how.

What Goes Into a Business Plan?
What you put in your business plan depends on what you wish to get out of it. Many people initially sit down to write a business plan because they need a business plan to get a loan or persuade an investor to partake in their venture.

This is why the contents of a business plan read like an application for a loan. A well-written, comprehensive plan, though, can serve as a guide that you can use for the first few years. While you can show it to potential investors, you can also use it to explain your business and how you plan to grow to board members, contractors, suppliers and potential employees.

Don't forget to mark each page of the plan CONFIDENTIAL (a light gray background "stamp" is appropriate) and to ask each person who reads the plan to sign a non-disclosure agreement. Be judicious in choosing who will see your business plan as your unique strategies can fall into the hands of your competition.

All business plans have two parts:

• The narrative that explains the goals and mission of your business and where you plan to look for assets.
• The financial plan, usually an elaborate spreadsheet broken down into time periods that show the breakeven analysis (the point at which you plan to show a profit).

The Parts of a Business Plan
The simplest way to write a business plan is to download an appropriate template and fill it in. Look for a business plan template that's geared to a small startup business. Generally, business plans for small startups are about fifteen to twenty pages long. All business plans should have a cover page, a two or three paragraph executive summary, a table of contents and some or all of the following sections:

• a thorough description of your products and services: incorporate photographs and charts, if you have them
• a description of how you plan to position your company, what it offers relative to the competition (include any market research you've done on competitors), what need the product or service is designed to fulfill and the nature of your target customer group
• a description of how you plan to market your products or services and how people will know you're in business to offer something your competition isn't (in other words, your advertising and publicity campaign)
• the nuts and bolts of your operation, including your management plan, personnel, product development, production techniques, accounting, quality control, customer service and fulfillment strategies
• the all-important, non-optional financials, including every detail of your expected start-up capital, income from sales and expenses organized to show anticipated profit and loss over a time period (usually one to four years).

Any literature you've produced (brochures, for example), letters of support and other documents should be included in appendices, which are lettered and included in the table of contents.

Before You Write Your Business Plan
If you've never written a business plan, gather a few samples. Borrow and copy plans from friends with established businesses and business professors. Alternatively, you can download and print samples from the internet.

Scan and compare the plans, noting the precise writing and how succinctly everything is expressed.

Next, download a template from the internet (or construct one from one of the sample, if you wish). Print it out. Use a highlighter to identify all the terms that you don't understand. Have someone with business plan writing experience explain the terms to you or you could look them up online.

Prepare a file folder for each section and label each one with a section name. Place any documents and literature that you have in the folders. Sections of sample plans that resemble what you want to say can be quite useful. If the first germ of an idea was jotted down on a napkin, put it in your business description folder.

Write the Plan
If you're a reluctant writer, avoid writing the entire plan in one day. Instead, tackle one section at a time. Writing well and correctly isn't your goal at the beginning. Put down your ideas and have a professional do some editing later.

Some experts advise you to write the executive summary last. Others insist that you should be able to articulate the purpose and methods of your business before you begin to write the actual plan. Generally speaking, the first sentence of anything is the most difficult to write. Check the samples to see how they lead off.

Jot down some key points in an outline to prompt your memory. Leave your desk once in a while to think about the important things you want to describe.



After the First Draft
Hire a good editor or ask a professional writer to help you polish your writing. Your business plan is a reflection of your standards. If it's full of errors, hastily prepared and disorganized, your readers will assume that your business will be equally chaotic. Your image depends on the standards you project in your plan.

Take or send the final printout to a copy shop and have it printed on quality paper and bound. Take the time to design an attractive cover and include your company logo, if you already have one. Make a dozen copies, as you'll be needing them for board members and potential investors.

After all your efforts, Murphy's Law of Business Plans kicks in: the handful of mistakes that are invariably left in any business plan will jump out at you in the middle of your most important meetings.