June 29, 2010
4 Steps to Write a Business Plan
If you’re looking to raise capital, you need a professional business plan. The only problem is, it takes most entrepreneurs 100+ hours to write a business plan from scratch.
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Writing a business plan can be split into four overlapping phases.
1. Write the business plan outline and build it out.
Open a fresh document and enter headers for the ten sections of a business plan. First describe your product and management team for the Company Analysis and Management Team sections. Then fill out the Competitive Analysis, Industry Analysis, Customer Analysis, Marketing Plan, Operations Plan, and Financial Plan to the best of your ability. Also draft an initial Executive Summary, with an eye to hooking the reader into reading the whole business plan.
You will rearrange this outline when you go to convert the outline to an actual business plan in Step 3. But do write the outline in this order, as the sections build upon one another in sequence as you assemble your ideas with hard research.
2. Do the research and build out the outline some more.
Research the competition‘s strengths and weaknesses, the best practices of the industry in which you operate, and the customers you will target. Purchase hard research into the marketing and operations costs of businesses similar to yours, their revenue streams, and best practices.
Use this research to build out the corresponding sections in the business plan outline. All of your financial research and reality-based projections will also occur in the Financial Plan, a section that many prospective lenders and investors read first.
3. Tuck it in and pass it around.
Rearrange the sections of the outline into the sequence in which the reader will encounter them: Executive Summary, Company Analysis, Industry Analysis, Customer Analysis, Competitive Analysis, Marketing Plan, Operations Plan, and Financial Plan. Add the Business Plan Appendix at the end, which contains any and all supplementary/supporting research reports.
Convert the outline to prose. Your writing must be clear and concise. The business plan must be based in hard research for all sections, with two exceptions. The Marketing Plan and Operations Plan sections can describe more creative methodologies, as creativity is the hallmark of profitable innovation in these areas.
Complete the draft and submit it to friends, family, associates, and mentors who will give constructive edits and criticism.
4. Write the final draft.
Using the edits and criticism you acquired in Step 3 – as well as any new thoughts, research, or changes you might have inherited in the process – edit your business plan for logical flow.
Finally, check grammar, spelling, punctuation, and formatting. Make the business plan objectively flawless in these areas.
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