Business Plan Drafting Tips

A good business idea remains just that, an idea, until it is written down in the form of a business plan. A business plan serves many purposes. It is a roadmap to how to make your business idea happen. It’s a way to get other people excited about working with you on your idea. It becomes a tool by which the bank and financial backers know you’re serious about this business idea. We at PaydayLoansCashAdvance have gathered together some tips to help you create a business plan that best represents your idea. The difference between a successful business and those that are not often starts with a great business plan.

The basic business plan structure contains several sections, each of which may be of interest to different people who read the plan. When you make a business plan, the goal is to include enough information to excite the reader, help them to see that this is a viable business idea, and give them a feeling of confidence that you can make this happen. The following are the typical sections of the business plan:

Table of Contents: This makes it easy for the reader to jump to sections in which they are most interested. If you choose to not use the standard section headings, use heading names that will make sense to the reader so they won’t be confused about the topic.

Executive Summary: This is a brief description of your business plan. It needs to have enough information that the reader will want to continue with the rest of the business plan. If they’re not excited about your business after reading the summary, they may skip the rest of the document.

Company Description: This tells the reader something about your current company, or about the company you intend to create as a result of your business plan. If you currently have a company, then make sure the reader understands why it is the best starting place for your business idea. If this is a new company then explained why it is necessary to create a new company to support the business plan.

Products and Services: This is where you explain the essence of your business idea. Whether this business plan centers on a new product or service, the reader has to understand what that product or service is and why it is in demand. This is another place in the business plan where you can lose the reader if your language is not clear and they can’t really visualize the product or service.

This is not a place to be vague or secretive, if you’re concerned about proprietary information. If you do have concerns, then you will want to create a nondisclosure agreement (NDA) that must be signed by anyone to whom you give your business plan for review.

Marketing Plan: This section indicates, once you’ve created your product or service, how you will get that item out into the hands of the users. Whether your business is a B2B or a B2C, you will need a marketing plan to get your product out in front of them. This section should convince a reader that you are capable of selling your product or service. Financial backers will especially be interested in this section of your business plan.

Operational Plan: This tells the reader something about the day-to-day operations of your business and how it will continue to support your product or service once it has gone “live”. This gives the reader the confidence that the company can support the product or service and help it to grow. This section of the business plan can be a little more general. You will have a much more detailed operations plan by which you manage your company.

Management and Organization: This section outlines the personnel structure within your company. It talks about the various management levels involved. It should be written to give the reader confidence that the right people are within the right positions. If you plan to hire people from outside of the company to take on certain roles, explain why you need to go outside of the company for that particular expertise.

Personal Financial Statement: This explains to the reader what your status is financially. This is important if you will be personally investing within this business idea. It’s also important for financial backers to understand your ability to manage their money effectively and how responsible you will be with the money they invest.

Startup Expenses and Capitalization: You will outline your startup costs within this section. From office space and equipment to personnel expenses and training, you will describe all of the expenses involved in starting up this business idea. This section needs to be as accurate as you can make it. Banks and other financial backers will need to feel like you have a good understanding of what it will take to make this business plan happen. They will be looking for areas where they think you have overestimated or underestimated expenses. Even if they believe that you have the best idea they have ever read, they won’t want to give you more money than you need, and they won’t want you coming back later to ask for more because you underestimated.

Financial Plan: While the previous section talks about the detailed items necessary to startup the business, the Financial Plan section talks about how to make your idea sustainable. It will specify the overall amount of financing needed to startup the business and get it to a point where it’s making a certain amount of revenue. You will want to indicate the target revenue and timeframe that you are forecasting. There are actually three different situations you should discuss with this section:

  • What your business looks like when you have broken even within your plan timeline
  • What your business looks like in the worst-case scenario
  • What your business looks like in the best case scenario

This discussion lets your financial backers know that you’re capable of running the business through various financial conditions. It’s easy to convince your supporters that you can run the business during good times. It’s more difficult to convince them that you can run the business through challenging times.

Appendices: In this section you can include any material that you think is relevant to the business plan. It can be information regarding your success at running other companies. It could be market survey information showing that you’ve researched what the demand is for your product or service. Any other information that supports why this is a good business idea goes section.

Take your time and do it right

It takes time to make a business plan that works. Even a small business idea can take a month or more to create a good business plan. If you’re serious about your business idea, then put in the time to create the best business plan you can. There are many great business ideas that never see the light of day because the business plan did not interest, excite, or build confidence.

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