Advantages Of A Good Business

Planning is a vital ingredient in the success of any business. Developing a business plan is not just a requirement, but a basic necessity for building one’s business nowadays. It is an honest truth that every business needs a plan, starting from large corporations to entrepreneurs. Developing a business plan will help one build a framework that would push his business to his actual destination. The business plan helps one develop work guidelines, map out strategies, understand one’s target market, measure performance, monitor progress, make future plans and raise additional capital either for expansion or to boost operations.

Quite often, the thought on the mind of most business owners or investors is failure. The only way to overcome this failure is to address the common reasons why businesses fail up front. Presently, the world is facing though economic challenges, global economic meltdown, high cost of commodities, high rate of foreclosure and difficulties in obtaining credit from banks, stiff competition, complicated tax laws and high operational costs, etc.. All these challenges faced by businesses today, even make it more challenging for start-up businesses to survive. In today’s world, both small and large-scale businesses have come to realize the need to evaluate their business potentials and formulate strategies for the future.

However, inadequate planning has been the reason so many businesses fail, and the rate at which they fail is overwhelming. It is usually believed that most businesses fail in their first year of operation and among those that fail, 80% of them do not have a well researched plan. It has been observed that business failure is not only connected with small businesses alone which I chose not mention here, go down too. Though the rate of failure is highly significant in small businesses, and it is the main reason why a good business plan is needed. Probably for raising additional cash and to provide potential investors and lenders with the information required to make investment decisions. This makes developing a business plan extremely important. One’s business plan has to stand out and his projection has to be firm due to higher competition in attracting funding for his business. Investors no longer risk their money on businesses that do not prove to have great potentials for them.

A business plan is like a road map, it shows one the route to take, the pitfalls to avoid in order to reach his destination, For instance, if one decides to travel by road from one place to another, he would first need a road map that shows him the route to take. He will need to determine the distance and how much gas his car will need to take him to his destination. Moreover, he will need to calculate how much the journey will cost him, if he intends to raise money, if he’s borrowing, how he intends to refund the money. Putting all this into consideration, he now has a traveling plan that will take him to his destination. In the same vein, that’s what a business plan provides one with, the strategies, the route, and a road map to success.

Incidentally, the idea of working with a business plan is for one to keep focus on his set goals. Statistics has it that many businesses fail due to inadequate planning. If one doesn’t know where he’s heading to, any route seems to be the right one. Most people make great mistakes by jumping into business without adequate preparation and planning. A good business plan helps one maintain focus on his goals and execute the strategies that the plan assisted him in creating. Just like a road, one’s business plan has to be consulted to make maintain his focus and not running business in a layman’s way.

Working with a business plan, it will prevent one from entering unfamiliar territory. The plan becomes a working map for him and his organization. I t spells out the things to do and things not to do, the functions and how everyone and every department should operate. It helps one become more efficient, reduce waste and redundancy, channeling one’s resources to rightful place and being a guide to the successful running of his business.

As a performance tool, it measures the progression of goals in one’s business by tracking, monitoring, as well as evaluating, and can also be used as checkpoints in measuring performance. The world today, is so dynamic that what applied today might not apply tomorrow, and as a result of this dynamism, a good business plan needs to be setup in order to protect one against risks associated with business.

In addition to a performance tool, perfect business plan should contain other necessary tools in its system, which really make it a perfect plan. It must have a human resource tool, a marketing and strategy tool, financial tool, communication tool, and most importantly, an investor’s guide. A well-defined business plan attracts others to be part of the vision. It has to have a well-defined goal and objective that will set the stage to bring others into the business. It should inspire teamwork and creativity among its people and ensures everyone understands the goals and objectives.

However, a good business plan defines one’s target market, the class of people he intends to sell his products to, how to reach them, promote his products, in addition, defines one’s market mix- people, place, product and price. People- this defines the people involved in the promotion one’s goods and services. Product- this defines what one’s goods and services are. Place- defines the location which also includes the means of delivering the goods and services. Price- defines how much one’s products and services are worth in the market which will enable him analyze and evaluate his return on investment (ROI). A marketing and strategy tool defines one’s business strength, his weakness, his opportunities and threats. It plots a graph that helps one reduce cost while maximizing profit.

A financial tool in a good business plan enables one understand his business financial position, develops his budget and determine how his finances will be allocated. It also calculates one’s return on return on investment, analyzes his income statement, cash-flow, balance sheet, break-even point i.e. the analysis that tells one how much sales needed in order to cover expenses, which gives the basis for pricing his products and services, and at the same time calculates how much that is needed to finance one’s business which helps in making his financial needs clear.

A good business plan communicates one’s ideas to people, communicates his mission, objectives, management approach, responsibilities and demonstrates how one’s strategy will increase profitability and performance, identifying his audience without overreacting his aims and objectives of his business plan. A business communicates in two ways- Internal communication and External communication. Internal communication includes communication of corporate vision, shared value, strategies, guiding principles and employee motivation. External communication includes branding, customer relation, marketing, advertising, media and public relations etc..

A good business plan is used to attract funding from investors. Most investors will look at a business plan as a decision-making tool. There are certain things investors look out for in a business. These include one’s management team, every investor will want to know a business owner’s managerial skills, passion, and his dedication to his business. A comprehensive description of how one’s products or services should be discharged, his customer base, his market and financial analysis. A business plan should have a realistic financial forecast. Every investor will always like to see his business associate’s return of investment, cash-flow and break-even analysis. Hence, a well prepared business plan is the key to attracting investors.

Are Business Plans a Waste of Time?

I recently attended a national entrepreneurship conference along with a number of other college instructors and well-known entrepreneurs. I found it interesting that two concurrent sessions offered conflicting points of view on business plans. One session featured a panel of successful entrepreneurs questioning the real world relevance of business plans. The other session focused on teaching students to quickly and correctly develop business plans.

I was intrigued by the panel discussion so that’s the session I attended. None of the entrepreneurs on the panel had ever written a business plan-at least to launch a business-yet they were all extremely successful. The revelation that they did not use written plans is not surprising, most entrepreneurs don’t. One reason given by the panel for forgoing a formal business plan is the natural tendency for entrepreneurs to cling to a business plan they wrote due to the investment in time and effort. The reality, they said, is that things change so much in the real world of business that the assumptions underpinning a business plan must often be altered or even abandoned to allow the business the flexibility necessary to survive. In addition, the entrepreneurs were adamant that a good plan will not make a bad idea work and a great idea probably will not be hampered by a poorly written plan-or no plan. Another concept discussed in the session was that what the entrepreneur is really selling to the venture capitalist or angel investor is the entrepreneur. One of the panelist remarked that, “If the investors believe in you, they will invest in your business.” The consensus from the panelists was that investors look for passion and vision in addition to the idea. They must be convinced that the entrepreneur is capable of persevering and making good decisions and adjustments to keep the business moving forward. Since there were college instructors in attendance, and most entrepreneurship programs require written plans, all entrepreneurs on the panel diplomatically agreed that requiring a business plan as part of a course or program of study was not a waste of time. They concurred that the process itself could offer valuable insight.

As a college entrepreneurship instructor I try to convey as realistically as I can the realities that entrepreneurs face. After attending this conference I realized that students may have difficulty reconciling the two seemingly conflicting points of view presented in the workshops. Certainly my students are aware of the statistics which suggest that most entrepreneurs enter a business without a written plan. To attempt to convince them otherwise would be disingenuous. If the panel was right why bother with a business plan at all? I believe that the answer can be found in the last nugget offered by the panel of entrepreneurs; it is the process that is most beneficial.

The planning process does not begin with the business plan. In fact, it is a mistake to write a plan too early. A feasibility analysis should be conducted prior to writing the plan so that the key assumptions underlying the plan are properly vetted. The research conducted as part of a feasibility analysis can also lead the entrepreneur to better understand their business. For example, if a focus group is used to better understand the target market, new insights can be gained which can lead to the development of a more competitive business model. The results of the feasibility study and the articulation of a compelling and competitive business model are the most critical components of a business plan. Coupled with a cash flow analysis these facts can be critical when procuring the necessary resources to launch a new enterprise.

Another point I like to make with my students is that the importance of a business plan depends on the type of business. A retail store with large capital requirement, inventory, payroll, etc. is completely different than a new venture in a technology driven industry that is rapidly changing and evolving. A business similar to Facebook, for example, has much less need for a formal business plan than the owner of a new sporting goods store.

In addition, the amount of borrowed capital required to launch a business will impact the need for a formal plan. Venture capitalist typically will want to review at least certain sections of a formal plan as part of their due diligence.

I believe that the entrepreneurs had a valid point regarding the tendency for business owners to become too attached to a formal plan. A critical time occurs when the business is launched and the entrepreneur begins receiving real feedback from customers. The decisions made at this juncture can make the difference between the success and failure of the venture. Should the entrepreneur hold to the assumptions of the plan or should minor or major adjustments be made? The entrepreneur needs to remember that the business is not on autopilot just because a polished business plan is in place. Adjustments must be made as conditions warrant.

The panel was not wrong when questioning the necessity of a formal business plan, but the planning process is distinct from the plan. A business plan, whether required or not, will enable the entrepreneur to better articulate their vision which may make writing a plan well worthwhile.

Business Plan Writing

A business plan is a crucial piece of documentation that will give your clients and potential investors a clear indication of what you are planning to achieve with your business, and how you intend to reach this level of success. In the event that some aspects of your business are unknown due to your current start up status, it is important to ensure that only clear and confident aspects of your business plan are included in your write up. However, when it comes to writing your first business plan, the most important thing to remember is to stick to the ‘basics’.

Basics for Getting Started:
The main purpose of a plan is to clearly and concisely display your vision for your business. The clearer your initial plan, the easier it will be to convey your vision to the reader. You should then provide an overview of the resources you have assembled in order to help you in achieving this goal. The fundamentals of your plan should also include details regarding your experience and skills and how these will help you in making your plan work. It is also extremely advantageous to link in your resume and/or portfolio to reconfirm the details included in your initial plan.

Mentioning the Economic Prospects:
It is always beneficial to state any short term goals you have for your business clearly. By doing this, you will be able to eliminate the need for any high cash requirements etc. which is vital as you must be clear in judgments of economic requirements and prospects. This way, your plan will be less likely to be written off as an over-confident endeavor. Being positive is one thing, but being prepared for every potential outcome with a contingency plan is another. The latter is valued highly when proposing a business plan. The level of confidence and trust in you and your business plan will increase when you are able to effectively present yourself to be well prepared, knowledgeable in your plan and niche market and other aspects of your prospective business.

Why Will Your Proposed Business Work?
This is a question which you will need to be able to answer clearly and concisely to any investor and so forth who reads your business plan. In order to do this effectively, you will need to possess a clear understanding of your targeted market and be able to confirm any facts you include within your plan with research materials, etc. You must also be able to display how capable your management skills are, as well as how you plan to organize the overall managerial side of your business in terms of employees you plan to hire and how you will identify the ideal candidates.

Before you submit your final business plan, it is extremely advantageous to have your business plan reviewed. It is much easier to identify weak areas of your plan or missed sections if you have this read through by your peers or others who are involved in business. Above all, it is important that you are realistic in writing your business plan. Whether you are just starting your first business or already have an established business under your wing, realism is what will be expected by any investor when they come to read your plan. By following the above guidelines, not only will your businesses plan be clear, concise and thorough, but will also be the right first step to starting up your business.

Writing a Business Plan

Lots of people want to start their own business. One of the first things that stops these would-be entrepreneurs from realizing their ambitions is the seemingly daunting task of writing a business plan. Writing a business plan, though, is a rather easy task if you understand your business, so let’s take a look at what a business plan entails.

Before we jump into drafting our business plan, we should think about why we are writing a business plan in the first place. Most business plans are used to secure financing for a business – whether it be a start-up or an existing company looking for additional capital. This financing could come from a bank, an equity or venture capital fund, friends, family or just about any other potential investor you could think of.

Another reason to write a business plan is to organize yourself, make sure you have thought through all the components of your business and make sure that it makes sense. A great idea for a product or service may not amount to a great business unless you can turn a profit through effective marketing, management of expenses, management of accounting and information systems, etc.

Things to Keep in Mind

As you write your business plan, keep in mind that your audience – whether you’re currently looking for financing or not – is likely to be a potential investor. You need to communicate to investors that your company understands its business and has thought through all the risks, challenges and opportunities involved in its industry.

To communicate this understanding to investors, you should try to provide sufficient detail about your business to demonstrate your knowledge. For example, you could write something like this: “According to the ABC Trade Association, profit margins for our industry average around 25%. With the procedures we have put in place, our business can achieve 30% margins due to the increase in our operational efficiency.”

There is no hard and fast rule for where or how you should add these kind of details, but using them will improve your credibility as a company.

You should also pay attention to your writing style. There is nothing to be gained by using fancy vocabulary or flowery language. In fact, such writing may cause your audience to lose sight of your business. Instead, you should write clearly and to the point so potential investors have a clear understanding of how you run your business.

The Outline

So with these ideas in mind, how should we structure our business plan? Below is one example of how a business plan can be structured. This outline contains the most commonly-used sections of a business plan but is by no means exhaustive of the areas that a particular business might need to cover.

Executive Summary
Business Highlights
Operational Overview
Market Overview
Management & Personnel
Financials
Appendix

The executive summary of your business plan should be a two to four page summary of your business plan. It should touch briefly on each area that is contained in the rest of plan and give the reader a good sense of your business even if they don’t have time to read the rest of the document. You may also want to touch briefly on the history of your company and its mission and values in this section.

Hitting the Highlights

Next it’s good to jump into the business highlights section. This section discusses what sets your business apart and what will lead to its success. You may want to highlight the experience of your management team, discuss the strength of your position in the market or any other factors that make your business competitive.

You may want to follow this section with a discussion of risk factors coupled with how your business mitigates or addresses these risks. Discussing risks is another opportunity to demonstrate that you understand the business and industry that you’re in.

Getting Down to Business

The next section is a discussion of the operations of your company. The operational overview is usually the longest section of a business plan and usually covers the business strategy, marketing strategy, the product or service offering, management and information systems and any other components that are important to the operations of the business.

An industry or market overview is also a helpful section to have. It will give potential investors who are not familiar with your particular industry or market a better sense of the environment in which you operate.

This section may include demographic information for the market where you sell your products or services. It may include a discussion of the regulatory or legal environment for your industry. You can also include some general statistics on the industry from a credible source such as a trade association. This will lend credibility to some of the assumptions in your financial projections in the next section.

The Bottom Line

One of the last sections in a business plan is usually the financial projections. Ironically, this section might be the section you want to start with when writing your business plan. Building a financial model for your business is one of the best ways to make sure that you’ve thought through all the basic components of your business and that it will eventually make money.

You’ll have to ask yourself several questions in the process: What are my start-up costs? How will my marketing strategy translate into revenue growth? What are my gross margins? What are my fixed costs and overhead? When will I break even? How much money will I need to raise to get started? What will my interest expenses be?

Your financial projects should consist of income statements and balance sheets. A good rule of thumb for a start-up is to show monthly income statements and balance sheets for the first two years of operations and then full-year projections for at least the first five years of operations. Depending on how long it takes your business to reach a break-even point, you may want to go out to ten years.

In addition to these financial projections, your financial section should include a discussion of your assumptions, an estimate of when your business will begin to turn a profit, key margins that you believe your business will achieve, etc. If your business is already up and running, you should include the past three years of financials instead of projections. If you have less than three years of data, you may want to forecast a few years out as well.

Finally, you may want to include an appendix where you can share additional data. You may want to add a few news articles here that highlight how quickly the economy in your market is growing. You may have some news articles on your business itself. Perhaps you have financial statements for multiple business locations that would provide more detail about your business.

How Long Should It Be?

The length of a business plan may vary depending on the type of business that it is, whether or not the business is already operating and what the business plan is to be used for. Some businesses may need a lot of technical description in order to effectively communicate how they will operate – and others are more simple.

Businesses that are already operating will be expected to provide a lot more details about their business such as the kind of accounting software they use, where their company is physically located, pictures of products or facilities, actual financial results, etc.

If a company is simply trying to organize its business and is not looking for investors, they may be able to get away with less details in their plan – although they may seek to dive into greater detail than investors might need.

A typical start-up business plan should probably run about 15-20 pages, though depending on the circumstances mentioned above, it could run a little shorter or quite a bit longer.

Setting Yourself Apart

On a final note, if you’re going to start your own business, you are going pro – and you should act like it. By all means, make your business plan looks professional. It should go without saying, but carefully read and edit your plan several times before sharing it with outside parties.

You may want to consider developing a logo for your company if you don’t have one already. Use pictures of your company or the products that it sells to break up the text of the document and engage the reader.

Again, these may seem like minor details, but sometimes a business plan may be the primary document a bank underwriter might have to go on as he or she is evaluating the credit quality of a loan application.

Having these details in place helps to communicate that you are serious about your business and that your business plan was not just something that you threw together a few days before because you needed it for a loan application. Know your business (or research it well), be as detailed as possible and present your company professionally, and you will have a solid business plan.

Tips For Business Planning

The purpose of this article, is to discuss why some businesses fail, and the relationship of these failures to poor or limited business planning being implemented. We are firm believers that absolutely every business should have a plan. Ideally, if you are going to produce a plan, this should avoid several major mistakes to ensure that it is not a poor quality business plan. Here we will discuss ten common mistakes which can easily be avoided, when writing a business plan.

1) The plan is poorly constructed and written and may contain errors in spelling, punctuation and grammar. A business plan, is a reflection of your businesses and a poorly executed plan can present a poor impression. You must conduct extensive reviews of the document, to make sure that there are no errors.

2) The presentation of the plan is not consistent and lacks a clear structure. The presentation of your overview is as mentioned a reflection of your business, and the following items will convey a negative image to the reader: inconsistent margins, missing page numbers, incomplete charts and tables without headings, or a missing table of contents.

3) The plan is not completed. There are a wide variety of different guidelines and templates which you may use as the basis of your business plan, and these will help to provide a basic structure. There are a number of different areas which should be included: a detailed executive summary, providing an overview of the company. SWOT analysis; detailed information around your customer base, and particular focus on any customer who makes up more than 25% of the businesses turnover. The businesses products and services; marketing and sales information; a profile of your management team; analysis of competition; and detailed financial projections. cash flows, income statements, balance sheets–for a minimum of 3 years.

4) The plan is too vague. The plan should always include specific information.

5) The plan contains too much detail. A sound basis for a plan is as follows: start with an overview, or executive summary of one to two pages, followed by the detailed business plan 10 to 15 pages; this should be followed by a detailed appendix, with further details contained within.

6) Assumptions contained within the business plan are unrealistic. Those assumptions which are critical should be alluded to, and they should be rational for including them. Many poor business plans will attempt to hide assumptions throughout the plan. It is important that you check any assumptions which you make against acceptable benchmarks.

7) The plan does not include adequate research. A detailed business plan should included detailed numbers, charts as well as statistics which will provide detail to any assumptions or projections which are made throughout the plan.

8) You make statements that indicate there is no risk involved in your new venture. Realistically there is always some element of risk, putting this across in the right way is extremely important. There are always risks. Understanding the risks of your business and presenting them with a coherent argument as to how you will mitigate or minimise these should definitely be included within your business plan.

9) You make statements that indicate your business will have no competition. Potential financiers or investors, will know that there will be competition, which may either be direct or indirect. It is therefore extremely important to acknowledge and define the competition in your plan, if you gloss over this, it may reflect badly on your research.

If you avoid these areas and take on board the advice provided when developing your plan, you should end up with a well structured and coherent plan. However, there are a few more actions you can take to ensure the development of a strong plan. It is important to consider the views of other business owners, potential investors and lenders as well as other professional experts. You can find a number of consultants who specialise in developing business plans. There is a toss up between the expense which you may incur in developing the business plan and the time which it may take to complete the plan to the same standards.

Business Plans

A business plan acts as a road map or compass; without it you will get lost in your business.

The biggest mistake is simply putting it off.

A plan contains a description of your business, an evaluation of your main competitors and several financial calculations.

But why are so many people so afraid or intimidated to write these plans of actions?

Many new business owners are so over-enthusiastic about their business concept, that they are desperately eager to begin and do not have the patience to look at the economic realities involved in their business.

Filling out the many financial forms in your plan can be an overwhelming process for any new business owner. Many are so intimidated by the financial calculations that they want to skip this process. If you recognize either of these tendencies in yourself, it is even more important that you prepare your financial calculations carefully and pay attention to what they tell you. Do not try to get out of it by telling yourself that your financial estimates will be wildly off base and yield useless results.

To alleviate this type of intimidation many have with a plan, it is imperative that Certified Public Accountants, bookkeepers, business plan or financial consultants be a part of your business support team. If you do not have these experts to assist you with your plans, you can take a course in accounting and buy the latest accounting programs.

Other resources to help you write a business plan include books, colleges and universities that work with Small Business Development Centers and counselors and mentors at the Service Corps of Retired Executives (SCORE). They provide low-cost classes on how to write business plans from $40 to $60.

Remember you are the brains of your business; your accountant is the heart and your attorney is the lungs. An accountant helps you keep track of your money and an attorney helps you protect it.

Since over 90% of start-up businesses are funded by private sources such as retirement or pension plans, unemployment insurance payments, savings accounts, divorce settlements, child support payments, etc., many people skip the business plan stage.

Even if you do not need money to start your business, writing a plan will help you see if your idea will be strong from the start. Without a plan, you leave far too many things to chance.

If you started your business without writing a plan of action and now you are close to running out of funds, then chances are you need to write an expansion business plan to look for other financing options while you move your business to the next level.

When seeking out funding for your business you need to make yourself known to financing sources well in advance of asking for financial help; approach multiple sources of financing; educate yourself on the available financing options; know which options are available to your type of service or product; determine which options to pursue at various phases of your company’s growth and always be ready to prepare your business for financing.

You definitely will need a plan if you are going to apply for a business loan, need investors, have business partners, have a management team, or are selling the business.

You can use your plan as a tool to generate interest from financiers, prospective employees and strategic partners.

Before you even start to write your plan, get copies of loan applications used by banks, commercial finance companies, and government. These applications will give you a good idea of how much financial information you will need to include in the business plan.

The most standard plan is a start-up plan, which defines the steps for a new business and the expansion plan which will take the business to the next level or to a larger market.

The plan count is not a good way to estimate how good your plan will be. Instead, measure the plan by readability. A good plan should provide a reader with a general idea of what a business owner is trying to accomplish after skimming or browsing over it for 15 minutes. The more standard start-up and expansion plans developed for showing outsiders normally run 20-40 pages of text, easy to read, well-spaced text, formatted in bullets, illustrated by business charts and short financial tables, plus financial details in appendices. Never write a business plan 50 or more pages.

At a minimum, your plan should have the following sections: Executive Summary, Company Description, Product or Service, Market Analysis, Strategy and Implementation, Web Plan Summary, Management Team, and Financial Analysis.

The most important part of your plan is the Executive Summary. The Executive Summary is an outline of the entire business plan. If you do not have a good Executive Summary, chances are the SBA, bankers and potential investors will not read the entire business plan.

Just remember that the most important audience for a business plan is YOU! Only you are accountable to all of the statements, claims, stats and facts inside of your business plan.

Remember by skipping the business plan stage chances are your business will face many, many risks and you might find yourself out of business within 2 to 5 years.

Writing a Business Plan

Do you want your business to succeed? Of course you do. Every business looking to succeed would be wise to take a little time to create a business plan. This important document will help you in any stage of business from start up to expansion to financing a new product or idea. Writing a business plan can help your business to increase its chances of success which is especially helpful during these difficult financial times.

Writing a business plan will be a lot of work. However, you will find that the process is not that difficult once you get started. One of the most difficult parts of writing a business plan is just getting started. Of course, having some tips and guidelines to follow can be especially useful. Here are some ideas to help you as you write your business plan.

What Do I Need To Include?

Your business plan needs to demonstrate that you know what you are doing and that you understand your business. Generally this knowledge and information is broken into distinct sections. This helps you to keep your business plan organized and easy to write. Lets look at each of the nine sections in a little more depth.

Executive Summary

Since your executive summary leads your business plan, it is important that you carefully construct this first section. In fact, the executive summary is so important that it is placed directly after the title page, even before the table of contents. Many find that writing this key section works best when completed last. The executive summary serves as a synopsis of all the sections of the business plan. If you wait until the end, you will be better able to write a cohesive and complete executive summary.

Within the executive summary, you will include your company mission statement. This mission statement should not be long, probably about four sentences in length, but should be carefully instructed. Many say that the mission statement is the most important part of the overall business plan.

Since your mission statement is only a few pages long, your executive summary will allow you to further expand upon key points mentioned in the mission statement. Consider including your business history, biographies of key players, an overview of the business including locations, employees and available products and services. You can also discuss goals and future plans. Use this section to really draw in the readers.

Many find that a bulleted format is ideal for this section. This section should be easy to read and scan so that potential investors can easily get an overview of your business. The biggest mistake that many make is including too much information. Make sure that your information only encompasses one or two pages.

Market Analysis

In the second section of your business plan, you will cover the analysis of your specific market. During this section you will showcase your business’ ability to succeed. Success is dependent upon accurate and complete market analysis. This section will show that you have done your research. Use this section to sell your business to potential investors. Show them how your business can succeed.

Thoroughly cover your business’ market. Talk about your industry and use specific details to support your statements. Details like industry size, growth rate and customer group will help you showcase your business. Include as many details as possible. Do not fill this section with generalized information. Make sure it is industry and business specific.

In this section you should also include the results of any market research studied that your company has completed. Also briefly discuss your competitors and their strengths and weaknesses. You may want to cover how your services will appeal to customers more than your competitors.

Detailed Description of the Company

After showcasing how your business can succeed in your specific market, it is time to illustrate a comprehensive picture of your business. Cover in detail your business including information regarding the type of business, the target market and how you can meet their needs and distinguishing factors that make your business unique.

Remember that each section in your business plan will overlap. This means that you may cover information more than once as you move from section to section. This is okay. Your business plan may be considered as a whole or may be viewed as individual sections. This means that each section must include all key information. Don’t neglect including important information simply because you feel it has been covered in other sections.

Organization Structure/Management

This section will detail specific information regarding your staff and executive positions. Cover how your company will divide work. Who will do what jobs? How does your business management structure work? Include biographies of key business personnel including owners, board of directors, management and other company executives. You should also discuss employee compensation and benefits.

In this section you will demonstrate your company’s ability to succeed through your management plan. Additionally you will help investors to realize your company’s potential as far as an employer is concerned. Investors know that good, long lasting employees can help your business to succeed. Therefore they are looking for strong and effective management as well as the ability to retain and inspire employees.

Marketing

How are you going to get the word out about your business? In this section, you will detail your plan. You can also discuss how your marketing strategy will lead to growth. Be complete and detailed in your plan.

Product and Service Offerings

This section may sound like a simple list of your available products or services. While this is one aspect, there is other information that needs to be included in this section. For each service detail the specific benefits of the products and services you offer. Discuss the advantages you have over your competitors with a specific focus on products and services. Also discuss how you can expand your product and services offering as time goes on.

Funding Request/Requirements

A business plan is often a tool used to help your business secure needed funding. If this is the case, make sure you include a funding request in your business plan. Be specific. Remember that potential investors need a thorough understanding of your requests so that they can make a decision about whether or not to approve your request. Be sure that you include the following information:

• What you need immediately in terms of funding
• Funding needs over the next several years
• How the money will be spent (be specific)
• Do you want loans, investors, partners, etc?
• How you plan to repay the loan

Financial Statement

This section is often carefully considered by potential investors. It helps investors to determine the financial solvency of your company. You will not just discuss your current financial state. In this section you will cover your financial past, your current state and your goals for the future. Include income statements over the last several years, balance sheets (both prior and projected), projections and available collateral.

It can be especially effective to include charts and graphs to better illustrate your financial plan. Including graphs and charts will help investors see the growth potential for your business and will make them more likely to approve your loan. Remember that the amount of funding desired must be in accordance with your financial projections. Investors want a return on their investment and will not invest more that they will get back.

Other Information

At this point you may feel that you have covered everything. However, there is probably other information that you want to include that couldn’t fit into one of the previous sections. This is the place where you will include it. You may want to list specific details in this section and then reference them in the other sections. This will keep your business plan from being cluttered with extensive details and information. Many business plans include items such as: credit reports, letters of recommendation, licensing and patent information, legal documentation, executive resumes and a list of business associates including your lawyer, accountant and business consultant.

Getting Started

You may be feeling overwhelmed at this point by the wealth of information you need to include in your business plan. Make sure you use an easy to read format. This means that you should definitely utilize headings, bullets and lists. Focus your writing to your audience. If the purpose of the business plan is getting a business loan, make sure your writing conveys this message.

How Long Should My Business Plan Be?

Try to keep your business plan between 20 and 40 pages. This may sound like an unachievable task. However, much of the finished length will be encompassed by formatting. Using bullet points, lists, charts and pictures will not only make your business plan more effective, they will help your business plan to be longer as well.

As you create your business plan, tailor your presentation to a busy professional. Assume that they will only spend 10-20 minutes perusing your plan. Make sure that you thoroughly sell your idea, needs and business during this brief time period. Further attract your audience using clear formatting, easy to read content, well thought out wording and correct spelling and grammar.