Business Plan Writing Guide

Business Plan Writing Guide

How to write a good workable business plan is something every entrepreneur needs to know. In the current world, businesses need to be made formal to attract investors and obtain business loans from banks. Here is a guide to what a business plan is and how to write it.

Importance of a good business plan

1. A business plan will keep you focused on your project
2. It is an important instrument in planning future activities
3. It helps project cash flows into and through the business
4. It is critical in securing finances from lenders and investors
5. --Helps you think critically if you're ready for the business
   

Parts and format of a good business plan

1. Introduction
   
   Provide a high-level review of your business that will help readers and potential investors understand your business model. Elements include:
   
   Key employees of your business, such as the CEO, President and Vice President
   Mission statement
   Details about the products or services your business will provide
   Qualities that will make your business a success
2. An executive summary
   
   An executive summary is an introduction to your business. This section should be clear, concise and to the point. We recommend that you revisit this section to review your work after completing the other sections of the business plan to assure consistency and maintain accuracy. The key elements of an executive summary include descriptions of:
   
   Your company, Products or services you sell, Your audience and ideal customer, Future of your business and your industry
3. Description of the business
   
   Provide a high-level review of your business that will help readers and potential investors understand your business model. Elements include:
   
   Key employees of your business, such as the CEO, President and Vice President
   Mission statement
   Details about the products or services your business will provide
   Qualities that will make your business a success
4. Market research
   
   Provide detailed information to show that you have a solid understanding of the industry within which your business will operate. If you have any further questions it may be useful talking to a mentor who could offer you specific guidance.
   
   We recommend including a description of the target customer for your business, a competitive analysis, and any legal requirements impacting your company and industry.
5. Competitor analysis
6. Sales and marketing plan
   
   Describe how your company will focus on its customers through its marketing and sales strategies. Then, show how your company will reach its customers and how it will sell its products. Elements include:
   
   How your company plans to grow
   How your company is going to communicate with customers
   How you will advertise your product or service
7. Operations plan
8. Management structure
9. Financial plan and cashflow projections
   
   This section is the most important for investors and lenders because it shows that your company is built on a solid foundation. It also illustrates how your business will be able to meet financial obligations, while maintaining a positive cash flow balance.
   
   If you do not have any financial information prepared, research industry statistics to estimate what the profits and costs will be for your company. If you still need assistance you can contact a local Small Business Development Center (SBDC) or SCORE, two of SBA's resource partners, through the SBA.gov Local Assistance tool. They are located across the country and provide free business counseling and answers.
   
   This section includes four spreadsheets:
   
   Profit and Loss Projection
   
   Shows your company's ability to generate a net profit, or your bottom line. This is also known as an income statement.
   
   Cash Flow Projection
   
   Displays the operating, investing, and financing activities of your company by detailing the money coming in to and going out of your business.
   
   Projected Balance Sheet
   
   Estimates resources your business will need, where they will be needed, and how they will be financed.
   
   Breakeven Analysis
   
   Shows when your business will be able to cover all of its expenses and begin making a profit.