When starting up a brand-new business, you need to be organized, thorough, and well-educated about what you need to do and what to expect. It’s all too easy to get caught up in the more ‘glamorous’ things such as branding, marketing, and sales, but before you can do any of that (there’s plenty of time for custom vinyl printing later), you need a rock-solid foundation.
You also need to make everyone involved in the business know what you’re planning, and exactly how you’ll execute your ideas. You can do this by writing a robust, comprehensive business plan. That may seem like an intimidating prospect, but it doesn’t have to be.
Here’s how.
Six Steps to Business Success
A great business plan is made up of six primary sections:
- Executive summary
- Opportunity
- Execution
- Company and management
- Financials
- Appendix
Let’s look at each of these sections in a little more detail.
The executive summary is always the first section of a business plan. It offers an overview of what the business aims to achieve and how it will reach those goals – usually in just a couple of pages. Essentially, it’s a condensed version of the more detailed information contained in the rest of the plan, and for that reason, it’s usually written last, once the other sections have been completed.
It’s pretty much impossible for us to overstate the importance of a good executive summary. Make sure that you cover all the critical elements of your business, even only briefly, and make sure to emphasize your unique selling points and what makes your business appealing. Make it clear and to the point.
If you’re unsure about your completed summary, try taking it out of the plan entirely and reading it as a stand-alone document. Do you still have a good grasp of the business, its aims, and how it plans to achieve them without reading the details? Then, you probably have an excellent summary on your hands. This is especially important if you’re presenting to potential investors. It’s very common for lenders and investors to read only the executive summary at first. If they like your idea, they’ll then ask to see the rest.
The ‘opportunity’ section of your business plan details what you plan to sell, or what service you intend to provide, and the opportunities presented. How are you solving a problem for your potential customers? What are you offering them? No business will survive if it isn’t providing some sort of product or service to people who need it. This is the section to cover these areas. You should also include your target market and how you plan to stand out from your competitors.
Moving on to the ‘execution’ section, it’s where you’ll cover how to turn ‘opportunity’ into a financially sound and successful business. You may want to include a marketing strategy, projected sales plan and goals, how you’ll measure your successes and failures, and an overview of operations. You’ll cover the management structure in the next section.
The ‘company and management’ section can help create confidence in your business by detailing the expertise and experience of the team you have or plan to hire. This is especially key if you’re looking to attract investment. Banks and lenders are much more likely to say ‘yes’ to companies they feel are low-risk.
Finally, it’s time to provide details of your financial plan. It will need to provide detailed information on what you expect to make in sales, your overall cash flow, and a profit and loss summary. If you need help with this section, ask an expert. You must get it right.
If you’re unsure how to format any part of your financial section, don’t worry. There are plenty of templates available for free online, or you can ask a local accountant or business owner for advice. Remember that it’s always better to ask and get it right, than to try and muddle through alone.
The sixth and final section of your business plan is the appendix. This is where you put all the information that you feel will be useful, but that doesn’t belong in any of the other sections. It might be additional information about your product, market research, or simply photographs of your product or premises.
Short and Sweet
Business plans don’t need to be hundreds of pages of excruciating detail. If you want everyone who reads it to make it to the end (and we’ll give you a hint, you do), it’s better to keep it as short as possible. Keeping it short also helps when you come to update your plan. This isn’t a static document and should adapt as your business grows and changes. It’s harder to change a 100-page business plan than a 20-page one.
Committing to a short, concise business plan also forces you to consider the language you use. It can be tempting to ‘show off’ your expertise and intelligence by using long, complicated words and sentences when shorter, simpler ones will get the point across just as well (if not better). Filling your business plan with jargon is a sure-fire way to ensure that it won’t get read all the way through, so stick to the language you know the reader will understand.
Forget Fear
If you’re writing your first business plan, don’t be afraid. You can do it, and do it just as well as all the other brand-new business owners who are just starting out without MBAs or business development training. In fact, the vast majority of people don’t have these qualifications, and they manage just fine. All you need to do is make sure you have done your research, recognized your skills, and fill in any gaps in your knowledge with expert advice. Remember, no one on the planet knows what you plan to do better than you do. That means that no matter what, you’re the most qualified person to write your business plan.
