How To Write a Business Plan

by Andrew Atkins

Learning how to write a professional and impressive business plan is no easy task but it is absolutely key if you wish to getĀ investment for your business. Though expert advice can be found, there is a wealth of information online and provided you do your research and work at it, there is no reason why you can not create a business plan yourself.

Though there are many different templates that can be found online, all roughly contain the same sections, though the exact titles may differ. I will now outline what those sections are and what you need to include within them. Though a single article can by no means offer you all the information you will need, it is a very good start and should point you in the right direction.

Business Plan How To Write a Business Plan

The most important thing to remember is that nobody is going to invest money in your business if you are not prepared to invest your time in developing an adequate illustration of both its current state and its intended future.

Section 1: Summary of Background

This section is simply an illustration of what brought both you and your business to this current point in time. Though this can be more difficult to write for a very new business, you still need to outline both your professional history and what brought you to this particular type of business, niche or idea.

Section 2: Business Environment

This is the section in which you demonstrate your knowledge of the market within which your business is operating. The primary means of developing such knowledge is market research and you need to demonstrate that you have been very active in doing so. Illustrate who your customers are, your competition and the current and expected shape of the market in which both operate.

Section 3: Business Background

This section is essentially the sales the pitch. It is here that you outline why your business is going to be successful. You do this through illustrating the unique selling points of your products or service and why it is that customers will benefit from them. Continuing from the last section, you discuss your customers in more detail such as their demographics and interests. You talk not only about the strengths of your business but also its weaknesses. You remember that all businesses have weaknesses and illustrating them and putting them out in the open is far more attractive to potential investors than potential skeletons in the closet. Finally you illustrate the opportunity that currently exists within your market for your business to grow. You establish exactly why now is the time that an investor will see the value of his/her investment in your company blossom over the coming years.

Section 4: Operations

Within this section, you outline just how your company currently operates. There are many factors that need to be included but one of the most important is the management team and why they can be trusted to successfully run the company. You need to offer a relatively abstract description of how and where your product or service is developed or provided. How many staff do you have, where do they work and what defined processes and operations are carried out on a daily basis in order for your business to function. How will all of these aspects of your business react to growth, will it buckle under pressure or will it benefit from economies of scale?

Section 5: Marketing

This section is essentially about establishing how you intend on selling your product or service. The first point that you need to make regards how much you will sell it for, why and this price relates to how much it will cost you to offer it. You then need to illustrate your marketing strategy and budget, who it will be aimed at and why it will work. Considering the nature of this section, I should not need to mention how important it is that you get this section right. You are essentially offering a complex answer to the simple question of will your product or service actually sell.

Business Plan 1 How To Write a Business Plan

Section 6: Investment

It is within this section that you must both outline how much investment you want, why you want it, what you are willing to offer in return and why said offer is reasonable. The primary thing that is offered in return for investment is a share of your business and that share will of course be an estimate of your businesses overall worth. For example, if a hundred thousand dollars will get your potential investors a twenty five percent stake in your business, you are therefore valuing your company at four hundred thousand dollars. Should you wish to obtain investment, your valuation must be fair and your entire business plan must attest to that fact.

Section 7: Financial Plan

This is the section that many people need help with and yet without a well documented financial plan, you simply will not gain investment. At the very least you need three spreadsheets illustrating your Balance Sheet forecast, your Profit and Loss Forecast and your Cash Flow forecast. If you do not understand how to create professional versions of such forecasts, paying a professional to draw them up may be your only option.

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