Category Archives: Writing a Business Plan

Business Planning, Writing a Business Plan

Win With a Business Plan

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No matter how small your business idea, a business plan can help you build the confidence you need to get to opening day.  Business planning is not just for large or high-growth ventures, and it really shouldn’t be put off until you need to borrow money.

As healthy as the planning is, many small and micro-business owners will put it off as long as they can. And it’s easy to understand why. Business planning involves the tedious process of organizing your thoughts and getting them onto paper, or more likely, into a word processor. It includes a whole whack of potentially unfamiliar activities, such as researching, writing and building a credible set of financial projections.

Indeed, why would anyone knowingly put themselves through such pain? Thankfully, the benefits far outweigh any negatives. Here 11 ways you will win by taking the time to develop a business plan:

  • You know where you’re going
  • You will have a roadmap or blueprint for your business
  • You will have a document to look back on in order to measure your progress
  • A plan will help protect your investment and equity from loss
  • You will find out if your idea will work
  • You can discover and solve problems before starting the business
  • You will build confidence in your business idea
  • The plan can help you get financing
  • You become the expert for your business
  • You will prove your business case
  • You will have a document to use for communicating with others, family, partners, investors, bankers

Business planning can appear larger than it really is, until you step up and embrace it. Think of it as a cost-effective learning process for anyone aspiring to operate a successful business in today’s complex global work environment. A business plan can be a giant step toward making your dream business a reality.

Planning your business doesn’t have to take up a lot of your time or money. Whether you are thinking of starting, buying or growing a business, I urge you to first develop a business plan. Once you take the plunge, you might just have fun doing it!

After all, it is you who really wins with a business plan.

Writing a Business Plan

Make a Plan to Succeed in Business

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The most important reason to write a business plan is probably to save your house, or grandma’s nest egg, or whatever investment you are putting at risk. A business plan will help you learn more about your business and serve as a tool for communicating with others, such as bankers or investors.

Here are seven things to know about business plans:

1. Most businesses are started without written plans. For the most part, plans only exist on a napkin or in the owner’s mind. Business planning is an unfamiliar trek for most people, and too often the task is avoided until they are urgently needed to get a loan.

2. By the time a business plan is printed, it is probably already out of date. Enterprises continually adapt to their surroundings and the plan is a living document that gets updated at strategic times.

3. Business planning is an organic, non-linear process. At any given time, you will be more knowledgeable in some areas than others. Effective business plans arise from building on strengths, developing strategies to mitigate weaknesses, and innovating as you learn more about your business.

4. The further a business plan projects into the future, the less reliable those projections will be. It’s entirely likely that year five predictions will be less accurate than year one.

5. A professionally prepared plan does not guarantee a business will succeed. A picture-perfect business plan is not worth the paper it’s written on unless the owner understands it thoroughly. The real value of a business plan is the knowledge you gain by doing it.

6. Plans that call for aggressive early stage spending will meet with resistance, especially where the shopping spree is predicated on using borrowed money. It’s usually healthier for a new business owner to solve problems through innovation, ingenuity and frugal investment of available resources.

7. While a business plan will help to increase your knowledge about your business, it will not do much toward helping you develop business trade skills, such as how to handle money, how to buy, sell and pay. Business trade skills are more likely to be learned from managing a paper route or operating a lemonade stand. Owning a business is the best way to learn the basic survival skills like knowing how to read the market, how to learn from it and how to change your mind.

Your business plan is more for you than it is for your banker. It will enable you to prove your business case, and to be reasonably sure that your venture can survive.

Once you’ve debunked your own assumptions and gathered enough evidence to demonstrate viability, you’ll have more confidence in your business idea. Armed with a better understanding of your business and realistic financial projections, you will be much better positioned to discuss your business with those who might help you.

Writing a Business Plan

More Writing Tips for the Wide-Eyed Business Planner

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Business Plan Writing TipsLast week I gave you 10 writing tips to keep in mind while writing your business plan.  Here are 10 more tips for the wide-eyed business planner.

Remember, when you are ready to sit down and write, just do it. Choose a method that works for you and a time when you will be left alone without distractions.

With any text element of your business plan, the first step is to write your rough draft, concentrating on your ideas and all the information you need to include. Don’t worry about grammar and spelling or any form of editing in the rough draft, you can polish and refine during the revision process. This first draft is not the place to be concerned with perfection.

Read the following list of suggestions prior to writing your business plan. You might also consider copying this list and hanging it in a visible location wherever you will do your writing.

11. Choose the right words
Avoid double-edged words – words that can carry an undesired connotation. Also vague or pretentious words, coined words and unnecessary intensifiers should be replaced or deleted.

12. Eliminate awkwardness
Awkward writing can make it more difficult for the reader to understand your message. To smooth your writing, keep the sentences uncomplicated and eliminate excess words.

13. Correct all typos and grammar errors
The errors that result from carelessness have a tendency to stand out to a reader and sabotage the reader’s confidence in the writer’s ability. Make sure you scour your document for the obvious embarrassing errors like misspelled words and missing commas. It is wise to have someone proof the plan for you.

14. Create a visual format that is easy to read
Use a mixture of text, tables and bulleted lists. Keep your paragraphs short to break text into smaller bites and make it easier for the reader to read.

15. Use appropriate pictures and diagrams
Use pictures or diagrams only where they compliment or simplify your message. Avoid using eye candy simply to impress your reader, unless your business plan is for a graphics-related business. Overuse of pictures can dilute your message and create the impression that you’re not serious.

16. Include your sources for key information
If you use tables from the local census archives, state the source. If you quote an article from a credible trade magazine, provide the name of the magazine and the article, as well as the date. This helps the reader build credibility and confidence in your research and your business plan.

17. Include important detail in the Appendixes
Whereas it is important to include a brief biography in the body of your business plan, it is more appropriate to house your complete resume in the Appendixes.

18. Refer the reader to related information
For example, at the end of your biography you might state, “See complete resumé in Appendix 6.”

19. Ensure numerical information matches text statements
A common mistake in business plans is to state conflicting information in different sections or elements of the business plan. For example, stating a different sales total in the executive summary than that shown in the financial section. Go through your plan and double check for this kind of discrepancy – before it gets into the hands of your reader.

20. Build a Complete, Cohesive Communication Package
As a business planning coach, I will often write up a list of questions and comments for a business planner. Invariably, the writer of the plan then responds with a list of answers to my questions. Over the duration of the business plan development process, we will sometimes do this half a dozen times or more, resulting in a half-baked business plan and up to four lists of responses filling in the holes. This is the raw material, not the finished product.

A finished business plan is one complete, cohesive communication package, with any important detail attached in the Appendixes for reference. Rather than submitting a half-baked plan with a tangle of disjointed responses to others’ questions, create a full plan with all the information included.

As you create your business plan you should involve others to critique and provide feedback. As the champion of your business plan, take control of this valuable process. Assess all feedback and questions for their value and relevance and then incorporate the useful information into the plan. View questions and feedback as gifts, as opportunities to clarify and strengthen your business plan.

 

Writing a Business Plan

10 Writing Tips for Wide-Eyed Business Planner’s

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When you are ready to sit down and write, just do it. Choose a method that works for you and a time when you will be left alone without distractions.

The business plan is arranged into a number of small, manageable writing tasks. The following suggestions apply to any of the many steps that include written outputs as well as to the entire business plan.

With any text element of your business plan, the first step is to write your rough draft, concentrating on your ideas and all the information you need to include. Don’t worry about grammar and spelling or any form of editing in the rough draft, you can polish and refine during the revision process. This first draft is not the place to be concerned with perfection.

Read the following list of suggestions prior to writing your business plan. You might also consider copying this list and hanging it in a visible location wherever you will do your writing.

  1. Write in the third person
    Write about your business and yourself as though they are separate entities. Rather than stating “I / we expect to bring in $24,000 in sales…” you might write “The business will achieve $24,000 in sales.”
  2. Lead your reader from general to specific
    Make it easy for your reader to understand what you wish to communicate. This general to specific suggestion applies to paragraphs, elements, sections.
  3. Be thorough
    You want to make sure that you have included all the necessary information. Check your notes to ensure you have covered all of the important points. Provide answers for obvious questions. Be sure to cover all of the relevant elements of the business plan and the key points indicated in each element. In the Appendices, provide any complex or detailed backup information to support the statements in the body of your business plan.
  4. Maintain accuracy
    Can you back up your statements with facts?  When you quote text or statistics, ensure that you record them accurately. Look for contradictions that may leave your reader wondering. Accuracy is the foundation that enables your reader to build trust in you and your plan; contradictions and inconsistencies are the seeds that grow into doubt.
  5. Be consistent with names and terminology
    To achieve clear meaning in your writing, choose and use your terms carefully.  If you wish to make your writing more interesting by varying your terminology, be sure to provide explanations where it makes sense to do so.
  6. Use an active voice
    Always use the active voice unless there is a good reason to use the passive. Active voice is more direct, more forceful, and often easier for the reader to understand. For example, “The owner will contact the customers” is active voice. “The customers will be contacted by the owner” is passive voice.
  7. Write positively
    Wherever possible, avoid writing negative statements, unless the negative aspect of the statement needs to be emphasized. It is advisable to extol the benefits of your products and services in your business plan but highly distasteful to make negative comments about your competitors.
  8. Minimize jargon
    Jargon is language that fails to communicate because it is full of long or fancy words. Most often jargon takes the form of technical terminology or characteristic idiom of a special activity or group. If you use too many words and expressions unique to your industry or business, you might confuse the reader of your business plan. If you need to use jargon, provide an explanation for your reader.
  9. Be concise
    Make all the words, sentences, and paragraphs count by eliminating unnecessary words and phrases. Avoid repeating the same idea using different wording – this tends to tell the reader you are unsure of what you are trying to say. Be careful to remove every word, phrase, clause or sentence you can without sacrificing clarity.
  10. Avoid clichés
    Clichés are timeworn expressions or ideas, such as “the price is right.” At best, clichés are obviously borrowed phrases that can be confusing to readers from other cultures. They tend to irritate readers when used repeatedly.

Happy business plan writing entrepreneurs! Next week I’ll give you my Writing Tips for Wide-Eyed Business Planners numbers 11-20.