Writing an effective business plan is an essential element of starting any business. The plan will be especially important when it comes to courting investors. This is your chance to explain why your business will make it and what amount of money and time it will take to achieve your goals. The plan should tell the story of why your business will succeed.
But the plan isn't just for show. Writing the business plan actually generates new ideas and forces you to flesh out current ones. A plan creates structure and organizes your thoughts. And once you actually start your business, the plan will serve as an operating manual. Writing a business plan will force you to take your ideas to a more concrete level. When beginning the writing process, it's a good idea to speak with other business owners, consult with experts on entrepreneurship and contact your local Small Business Administration office to get help from people familiar with the process.
Here is an outline of a typical business plan.
- Cover & introductory pages
The cover page of your business plan should bear the name of your company, the logo, and your contact information. Also, you should include a very brief (two or three sentence) description of your business. Don't try to do too much with your cover and introduction pages. These pages are simply meant to encourage the reader to keep going.
- Executive summary
The executive summary portion of your business plan should give the reader a more detailed understanding of how your business will operate. It is a snapshot of your entire business plan and gives the reader a framework to understand your idea. This section is generally no more than a couple of pages in length and is written after completing the entire business plan. The executive summary is usually written last because you want to be able to look through the rest of the plan and summarize the key points.
Although the cover and introductory pages should grab the reader's attention, the executive summary is the real "teaser" part of your business plan. This is your chance to get readers excited about your potential business and demonstrate to them how you are going to succeed. Sometimes, venture capital firms and other investors will read only this section to determine if they are interested. ~
- Industry analysis
The market information/industry analysis section of your business plan should include all relevant information on competitors and possible outside influences that will affect your business. In order to put this section together, it is important that you study your competitors and experiment with their products and services. Determine past events that have brought the industry to its current form. Understand what future developments will be important to the landscape of the industry. Investigate developments and changes in the industry you can capitalize on.
- Description of venture
The description of venture section is a detailed analysis of your company. Where the executive summary is only a page or two that briefly outline your business idea, the description of venture section is meant to be a comprehensive explanation of your company. Give the reader an accurate understanding of what your business is about. Share your future goals and vision for the company. Describe the personal skills, resources, and contacts you have that will make your business a success. Describe how you came upon the idea and what makes it different from what already exists in the marketplace.
- Operation/production methods
The more efficiently your business can get its product or service to the market, the higher your profit margins. The operation/production section of your business plan should give the reader a general understanding of how you will create your product or administer your service in the marketplace. For example, the advent