A Five-Step Guide to Writing a Business Plan

A Five-Step Guide to Writing a Business Plan

A common question is, "What constitutes a successful business plan? or "How do I make my plan attractive to lenders and investors?" .
The short explanation is that "good deals" are what lenders and investors—whom I shall refer to as "readers"—are searching for. A "good deal" is defined as providing the reader with a respectable rate of return in exchange for the assumed risk. The long answer is that you should produce a plan that readers would be interested in reading and then distribute it to readers who are searching for projects similar to yours with the right amounts of risk and return. The first half of the equation—how to draft a business plan that people will want to read—is covered in this article.

Plans that allow readers to quickly and accurately form an opinion about the project are what they want to see in a plan. The stages to write that plan are as follows:
The three most crucial components of a business strategy are research, research, and research—to borrow a phrase from the real estate industry. The accuracy and comprehensiveness of your information will ultimately determine the success or failure of your plan, even when other factors are crucial. In addition, you are going to be taking a chance with a project that will cost you money in the future; how much knowledge is too much? First step:
1. Develop your project expertise. Find out everything you can about:The clients you plan to sell to (your target market).The rivalry.The true costs of running your company (ask for estimates).the real outcomes of such initiatives.Your sector.The physical location(s) of the project and any potential effects on it.those who are going to be essential to the effort.

(You are welcome to utilize the questions we use to query a business plan using FundablePlans as a guide. At http://www.fundableplans.com/how-to-do-a-business-plan.html, you can get it by email.
You should now have a mountain of research if you followed the preceding instructions: sticky notes, websites, reports, quotes, etc. What does it all imply, though? Step two:
2. Examine. (Ideally) You were excited and thought "this is a sure winner" when you originally had the idea for your project. This is your chance to determine whether your emotions were justified. Analyze your project's "SWOT" factors—strengths, weaknesses, opportunities, and threats—critically. Find out what you can do to maximize the S and O and reduce the W and T.
You may no longer feel like a "sure winner" after taking steps one and two, which is a good thing. If not, you've either discovered the next "sliced bread" or you have to go back and review the earlier steps. Proceed to step three, assuming that your analysis and investigation demonstrate that it is a valuable use of your time and resources (as well as your readers').
3. Projections. Where "rubber meets the road" is this. You will now inform your audience that "this is what will happen to the money" based on your research and analysis. Accounting projections known as "pro forma" statements are what you'll use for it. Send statements for three or five years, with the first year often completed on a monthly basis, the second and third years completed on a quarterly basis, and the latter two years, if included, completed on an annual basis. In any case, comprise:statements of operation.projections of cash flow.sheets of balances.Add at your discretion the following ratios: loan to value, debt service coverage, etc.

Together with the aforementioned, you should typically include a "Source and Use of Funds" that details where the initial capital came from and how it would be used.
At this stage, you are either certain that you have a winner (different from "a sure winner" in that you are aware of the challenges but are willing to overcome them) or you are starting over to reconsider your concept. Step four is to follow if you "have a winner":
4. Draft the strategy. It goes without saying that proper grammar and spelling are required. You ought to be precise, succinct, and thorough. Add a ton of interesting facts from your research to your strategy. Instead of ignoring the W and T in your SWOT analysis, carefully outline your plan of action for handling them. Steer clear of clichés and your personal ideas; readers need information to decide whether or not they agree with the notion, not your cliches. When responding, attempt to be as brief as you can be while providing all the details. Save for the Executive Summary, make sure your responses are "short, sweet, and to the point"—that is, somewhat factual and dry.
Conversely, you "sell the sizzle" in the Executive Summary. Here, you assert that your project is dynamic and deserving of careful evaluation. You must persuade the reader to read your strategy and explain your enthusiasm for the undertaking.
As there are authors of business plans, there are probably as many different ways to put one together. Visit http://www.fundableplans.com/sample_business_plan.pdf to view an example of an outline. (To view it, you must have Adobe Reader. Our logo is not part of our plans.) Copies of the documents your strategy references and past business data (assuming the company is not a startup) should be attached.
Now that you've completed the majority of the work, step five remains: 5. Go over and make revisions. The strategy should be reviewed by the author(s) and then by reputable experts; the more reviewers you can assemble, the greater the chance that you will identify any issues before the reader does.
If you follow the previous steps, your business plan should be read and, ideally, funded. Feel free to email me using the address below if you have any queries about business planning.
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