Venture Capital Firms

The Process of Creating a Successful Business Plan

Are you interested in learning how to create a successful business plan as quickly as possible? Research is the critical first step. Is there a market for your service or product? Which companies represent your competition? Once your research is completed, you’ll need to develop a strategy, assess your expenses and revenues, prepare a draft business plan, and then revise and finalize it.

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• Research

Interview potential customers and other entrepreneurs, read articles and examine relevant databases. These are some of the resources you can use to research your target industry as a whole, your niche market, your competition, and your costs of doing business. Take detailed notes on everything and keep them organized. You’ll be referencing various sources in your business plan – cite them carefully.

• Create Your Strategy

Begin with the standard best practices within your industry. Doing this will ensure that your strategy is solid; it’s already been tested “in the field” by other entrepreneurs. You will, however, need to create additional strategies that differ from those used by other companies in your industry. Doing this will distinguish your venture from your competition, but it will also create “entry barriers” that can help your company succeed. Your strategies will form the basis of your entire business plan.

• Do the Math

Your business will incur expenses, so add them all up. Include projected operational costs at year one, along with five-year and longer-term projections. Next, develop revenue projections for each of those time periods. Your projections should be based on your strategy and the research you performed. All projections (income and expenses) must be realistic in every way. If potential investors sniff something unrealistic or believe you’re being naïve, your business plan will join the pile of paper to be recycled.

• Prepare an Initial Draft

The initial draft of your business plan will not be all that difficult to prepare if you’ve completed the previous steps properly and thoroughly. The draft will flow from the information you’ve accumulated. The information simply needs to be converted into well-written sentences and organized into ten standard business plan sections: Executive Summary, Company Analysis, Industry Analysis, Customer Analysis, Competitive Analysis, Marketing Plan, Operations Plan, Management Team, Financial Plan, and Appendix.

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• Revise, Edit and Hone into the Final Version

Your first revision should be for logic and completeness. Because your business plan should be as succinct as possible without losing sight of the overall picture, you’ll want to remove any redundant content. You should then proofread and edit your plan for punctuation, spelling and grammar. Formatting comes last. Have someone else read through your business plan carefully (hire someone if necessary) before you finalize it. Burnout can lead to missing obvious flaws in your document.

Peter

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