Developing Your Business Plan
The Business Plan is possibly the most important document a business will prepare. It can also be one of the hardest tasks for a business owner to complete. It takes time to research and write a business plan - time that most business owners usually don't think they have. But research has shown that businesses that start with a formal business plan are considerably more likely to succeed than those that go without a written plan. The business consultants at the Idaho Small Business Development Center encourage all businesses, whether a new venture or an existing enterprise, to take the time to write a business plan. The time spent writing the plan will be more than paid back in sound business decisions.
For a start-up business, writing a business plan will help determine if the idea is feasible. It will allow the opportunity to assess your personal and professional resources; analyze the market and competition; evaluate your finances; determine your organizational and management structure; and finally; find out the degree of risk associated with your business idea. In addition, a business plan is a requirement for obtaining financing.
For existing businesses, your business plan is a written statement that describes and analyzes your business and gives detailed projections about its future. It should be a flexible document that allows you to adjust and re-analyze the individual parts of your business ideas before spending money on implementation. This ability to fine tune business concepts and growth plans increases your chance for success over time. The plan will help you make decisions and provide the tools to analyze problems and develop solutions.
One of the best ways to complete a high quality business plan is to take the
NxLeveL course for Start-ups or Entrepreneurs through your local Idaho Small Business Development Center.
Business Plan Outline
There are as many ways to organize a business plan as there are businesses. The important thing is that it meets your needs as a business owner and responds to the needs of those who will read it. It is essential that you are very familiar with and can explain each section of your business plan. Use your own style to convey your message in the most appropriate manner.
The following outline is taken from the
NxLeveL Start-up and Entrepreneurs courses, a highly recommended course offered through the Idaho Small Business Development Center (see
Training and Events). It will serve as a guide to help you understand the components of a business plan.
Cover Page
The Cover Page should include the following information:
- Name of the Business - use the full business name. If your corporation carries one name, but you actually do business under another name, show both.
- Company address
- Company phone numbers - include fax, 800 number, e-mail address, and website (if available)
- Logo (if you have one)
- Names, titles and addresses of owners
- Month and year the plan was completed
Table of Contents
A standardized format for your table of contents is appropriate. At a minimum, emphasize the major section headings below and the page number that starts the section. It is even better if you show the detailed headings under the sections so the reader can find an individual piece of information if desired. Click on the title of the sections below to see a more detailed description of the content.
- Executive Summary
- Background Information
- Products/Services and Industry Profile
- Management Structure and Organization
- The Marketing Plan
- The Financial Plan
- Appendix/Supporting Documents
top of page
Writing Hints
Most comprehensive business plans average from 25 - 40 pages plus an Appendix. The length should be dictated by how much detail you need to describe your business and analyze your growth plans. If you plan to attract investors, your plan needs to look as professional as possible. The most important thing that your plan needs to convey is your ideas, research, and analysis in a readable format.
If you're finding it hard to get started, one good writing technique to put your first thoughts down on paper, then let them rest for a few days. Once you return to these first written thoughts, you can then edit, refine, expand or revise them into a statement.
The written Business Plan should be:
- Typed and printed on quality paper
- Absolutely free of spelling and grammatical errors
- Presented in a hard folder or binder
- Contain charts and graphs that are consistent in style
- Be clear, to the point, and easy to read
- Give brief definition of industry specific terminology
Once you've cleaned up your document formatting and any errors, it is then ready to be passed along to a trusted friend, relative, or SBDC consultant for review. Keep an open mind when responding to their input.
top of page
Making Use of Your Plan
In developing the plan, you will have evaluated your marketplace, customers, and sales strategies. Since successful entrepreneurs are continually developing new ideas, refining old ones, or adapting to a changing environment, your plan will help you look at what you are currently doing well, what you could be doing differently to improve your business, and what you are considering for growth possibilities. It should be a flexible document allowing you to fiddle with the individual parts of your business concept without any cash outlay. This ability to fine-tune your idea and business concept increases your chance for success over time.
A business plan may also be used to determine the interest of potential investors or lenders. A plan is essential when seeking financing. It helps financiers make decisions more quickly and easily. Since friends and family provide most of the financing for business start-ups, the plan may convince them that you are serious about becoming an entrepreneur.
The plan is a written document that describes and analyses your business and gives detailed projections about its future.
When you present your Business Plan in person, you should:
- Dress cleanly and professionally
- Speak slowly and clearly
- Look directly and confidently at your audience
- Prepare and budget your time in advance
- Present a compelling executive summary in the first 30 seconds
- Use the next 2 - 3 minutes to provide details and supporting information
- Finish with a clear conclusion and detail of what you want from the listener
- Use simple charts or tables to clarify ideas and focus attention
- Practice! Practice! Practice!
Confidentiality
Since your business plan contains very detailed information about every aspect of your business and your personal finances, you should hand it out carefully and wisely. The practice of numbering copies and requiring a signed agreement not to make copies and return any unneeded copies may be a way to protect this important information.
top of page
(Used with permission from the NxLeveL Start-up and Entrepreneurs Workbooks. For more in depth information and personalized assistance, we recommend taking the
NxLeveL course offered through the Idaho SBDC.)
Additional Resources
Remember, as difficult and time-consuming as it may seem, the only way to have a good business plan from which to start and grow a successful business, is to complete the plan yourself. If you don't write it, you're not intimately knowledgeable about what it says and it's harder to sell your concepts to others with a convincing presentation. Your business plan is a dynamic document that should be referred to and revised often. It's a partner in your business who reminds you of your goals, objectives, milestones, market, etc. It grows with your business to help you make sound business decisions to ensure your success.
While we do not recommend getting someone else to write your business plan, that doesn't mean you shouldn't get help in preparing your business plan.