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Seven Preparations for Writing a Business Plan

Writing a business plan is a daunting task. If you do not know that by now, you will discover that soon after you have read your first set of instructions for writing a plan. While each of these preparations will require much of your time and efforts, they will help to make the writing of your business plan easier.

Writing your own plan is best because you probably have superior knowledge of your product, your target market and your own capabilities. Eventually, when you are required to defend your plan, you will be better informed of its contents and its rationale. If you engage someone else to write your business plan, you will still have to supply much of the following information anyway.

1. Enter an outline in your wordprocessor. You can copy excerpts from books, online searches or pamphlets from government agencies. Finding appropriate content for your venture could take quite a bit of time. It's a good start for overcoming inertia, it provides places to record information as it is gathered and your outline can become your planning and control file.

2. Begin collecting contact details for all your references: data sources, business plan writing instructions, resource persons, online sites, libraries, bookstores, etc. The more -- the better. Exercise caution if you think your idea is hot for a local and limited market. Reveal your concept and your research only to a trusted few. Someone with similar attributes and skills with access to more money could beat you to an exclusive market share. In my business classes there was always, at least, one student accepting my offer to submit the weekly submissions in a plain kraft envelope.

3. Establish formats and content for appendices such as floor plans, schedules and product details that could be time consuming to gather into an appropriate presentation.

4. Gather industry data. Lenders and investors have access to


financial ratios. Ratios are difficult or costly to obtain for some types of businesses. Sample financial statements are more easily found. So, find several that have revenues and expenditures similar to your venture and calculate averages for your own ratios. Gathering extensive marketing information on your potential competitors and for your target market requires a lot of preparatory work. Your readers will expect your data to be cross-referenced and full explanations for any abnormal ranges. If your research requires you to have Standard Industrial Codes (SIC) get them at http://www.osha.gov/pls/imis/sicsearch.html or http://www.census.gov/epcd/www/naics.html.

5. Perform "what-if" experiments on spreadsheets to find the best presentations of tables and charts for cashflow projections, break-even estimates, product life cycle, market segmentation, implementation schedules, training programs and all the other ingredients ensuring the success of your venture. Accuracy and readability improve with each reiteration or rewrite.

6. Begin your networking by joining and attending appropriate associations and trade fairs. Ask about or just listen to the many problems being shared. Arrange meetings with as many people you know who are familiar with businesses similar to your venture.

7. Meet with a lender or investor for advice. Try to determine their expectations for your venture and for the content of your plan. Ask for any booklets and their networking suggestions. Do the same with experienced borrowers.

You will appreciate the benefits from your due diligence on these preparations. May the writing of your business plan be less daunting. I wish I could tell you it will be a "piece of cake."

About the Author

Gerry added practical wisdom to his college and univeristy courses by owning and operating small businesses. That wisdom is now online at
http://www.UncleMaxSays.com

 

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