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June 26, 2010

5 Steps to Write a Business Plan

Writing a business plan takes tens of HOURS of planning, research, strategizing, calculation, and of course writing. (You can finish it much faster if you
use this “short-cut” )

Here are 5 steps to create a professional business plan.

1. Write an Outline

Use a standard business plan template. The ten sections of a business plan are, in this order: Executive Summary, Company Analysis, Industry Analysis, Customer Analysis, Competitive Analysis, Marketing Plan, Operations Plan, Management Team, Financial Plan, and Appendix. Fill in what you already know about each section. Do not deviate from the standard business plan model. Investors need to be able to know where to look for the information they seek.

2. Do the Research

The preponderance of research you will do will be for the Industry Analysis, Customer Analysis, and Competitive Analysis sections. Use reliable, industry-trusted sources to discover market facts, stats, and trends. For the Marketing Plan, Operations Plan, and Financial Plan sections, research start-up and operating costs, potential locations if relevant, and available labor pool in your niche. Research your own company as well, including existing and required labor, for the Company Analysis.

3. Develop a Strategy

Based on your research, decide whether to continue with your business plan. You may discover that there is no market for your business and discard it. If there is a market, use your research to identify and map all revenue streams from target market to company coffers. That information will appear in your Marketing Plan. Also detail how the company will be operated, to be reflected in the Operations Plan.

4. Calculate All Financials

This informs your Financial Plan. Activities, costs, and revenues should be stated in accounting terms to create the all-important pro forma (projected) financial statements for the company. Use a financial template in a spreadsheet program to fill out a rock-solid financial plan. Otherwise you may need to consult an outside accountant (unless you are an accountant yourself.) Investors scrutinize this section the hardest of all the sections of a business plan.

5. Write the Narrative

Write the business plan in this order: Industry Analysis, Customer Analysis, Competitive Analysis, Marketing Plan, Operations Plan, Company Analysis, Management Team, Financial Plan, and finally the Executive Summary, which encapsulates the essence of the entire business and hooks investors into reading the whole plan. Scoot the Executive Summary to the front of the business plan, then tack on the Appendix: the place where all your supporting materials (expanded analyses, infographics, etc.) are placed.

A common mistake most new business plan writers make is to focus too narcissistically on their own business, at the expense of thoroughly understanding the market and industry in which their businesses operate. Be mindful of this, and you will write a business plan that makes investors pay attention.

Want to finish your plan faster?

Use this short-cut to finish your business plan in 8 hours (or less)!


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