10 pointers for writing a Business Plan

As a business owner, you may be asked to submit a business plan if you need to borrow money from a bank or are searching for investors. But in general, it’s a good idea to have a business plan in place even if someone isn’t asking for one. Business plans are a great way to bring your business into focus and make a case (even if it’s to yourself) that your business is on the right path and is growing.

businessplanIf you already do a budget and a strategic plan, pounding out a business plan should be a fairly easy process for you. The problem is, business owners equate doing a business plan to getting a root canal. Listen, it’s not that bad (the business plan, not the root canal).

Here are some tips to help you get it done:

  1. Keep it as short as you can, while still covering everything you need.
  2. Write the first draft yourself. The greatest value in writing a business plan is the way it sharpens your thinking and makes you ask better questions about your business.
  3. If you feel insecure about your writing abilities or don’t have the time, go ahead and hire a professional to help you edit and format it, but at least write the first draft.
  4. Spend time thinking through your assumptions. What things need to be true in order for your business to be a success? Then do research to validate those assumptions.
  5. Go deeper than just an Internet search. What experts can you talk to? Are there professional research reports you can cite?
  6. Every statement you make in the written portion of the plan needs to be reflected in the pro forma. If it was important enough to mention, how will it impact the numbers?
  7. Everything takes longer, and costs more than you think – plan accordingly. Going back to ask for more money half-way through your start-up phase is very expensive. You will get a lousy valuation on that round if you can raise it at all.
  8. Investors want to back a solid team, more than a solid idea. The idea you have success with is not likely the idea you are writing up now. It’s a related idea that you find along the way. The investors want to see a team that has the smarts and determination to see that new idea.
  9. Don’t be afraid to show some personality, humor or fun. Be professional, but be yourself. Remember, anyone who is going to read your business plan – investors, bankers and employees, other founders – have likely read dozens, or hundreds of these. Make yours stick out.
  10. If first you don’t succeed, try, try again. No business plan is a silver bullet. If this plan isn’t coming together, or investors aren’t responding to it, write another one. Find another idea. Keep going until you find something that matches your passion with a big market demand.

While some business owners grunt and groan about having to do a business plan, once they finish one, they are happy they did it. Business plans bring about clarity and lend to a business owner’s confidence. That’s well worth your time, right?

Have you ever done a business plan? What benefits did it provide you?

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