Writing a business plan

This blog post is sponsored by:
Best Domain Name Resources

Writing a business plan is the equivalent to a programmer needing a flow chart- it is absolutely necessary if you are serious about setting up a business successfully. The business plan is essentially the blueprint to your company, and your future. It helps set the direction of your business, and is an actual requirement in most cases when seeking financing. Depending on your business, there are a few elements you should focus on when writing your business plan.

First, you should state your primary objective(s) in the introduction. Explain what the purpose of your business is, the services you will offer, who you will cater to, and what kind of employers you will need, if any.

Next, you will have to summarize the different aspects of your business. Explain the concept of your business, which will most likely include parts of your introduction. After the concept, you will want to summarize the product or service in more detail. Next, it is very important you make out a market analysis. Find out who will need your services, how many, and what kind of competition you could be facing. You will also need a marketing strategy to carry out your plans. This can be from word of mouth as a result of offering a great service, brochures, online ads, billboards, and classifieds. Your marketing strategy should be thorough in finding the best way to get your business known, with offering a better, faster, or cheaper service than your competitors. Lastly, your summary should include your financial situation. Your initial funding, any expected profits that could go towards your business plan, and any salaries or expenditures you will endure should be listed in detail.

Next, you will want to write a brief business description. State the history of the business, core activities, and your current position in the market. If you are just starting out, be sure to outline where you want the business to be in a few years. List any steps you have taken, such as getting business license or rented space to conduct your business in. Be sure to list your weaknesses, strengths, and threats of your business. Focus on keeping your strengths strong, but look at your weaknesses and threats with great care.

A more detailed market analysis should follow your description. Who are the customers, and what is the geographical location of your customers? What kind of purchasing power do they hold, and how many customers from each location can you attend to? Look into the bureau of statistics, surveys, and any other type of informational analysis you can get your hands on.

A more detailed marketing strategy should follow the analysis. Describe ways your business will cater to customers, and in return get more business for you. Find promotional literature opportunities such as flyers or other ads. Establish a clean-cut pricing policy and stick to it, so that your customers will not be confused or mad over false advertising. Find your ‘competitive edge’ by offering free quotes, guarantees, and continual support or supplies.

You will need to identify your business structure and start up costs next. Will the business be run by you, a group of partners, or a limited partnership? Write down your business name, copyright information, designs, patents, and trademarks- and register them if you haven’t already. It is very important you look at your startup costs. They may include accounting fees, market research, planning, legal fees, publications, travel, and other expensive things that should be taken into account. Be sure to label your initial recurring costs, such as lease, gas, electric, wages, software, equipment, and other expenses in a separate category.

Next, you should calculate your break even costs. Add up any possible expense you could think of having for your business, and calculate the amount of sales or profit you will require to ‘break even’. This will let you know where you are at, and if you should market more or less, or even try more desperate measures.

Finally, you will want to choose your administration if possible. Make sure administration you choose are able to perform responsibly and efficiently.

After your business plan is complete, you will want to revise it several times. It will be the blueprint of how to run your business from here on out. You should update this plan every year at-least, or whenever you reach the ‘break even’ point. Remember, the key to every business success is planning. It is strongly recommended you take the time and follow these instructions, if you are in fact, serious about running your own business.

March 12, 2007 | Filed Under Tips

Comments

3 Responses to “Writing a business plan”

Carl on March 12th, 2007 1:13 pm

Firstly, I don’t agree that a business plan is ‘absolutely neccesary’ as many businesses that took of and ran fine long-term will atest to.

You quickly cover a lot of stuff that does make sense for a business plan. Of course, you really need to go into depth with each area (and you should blog these out fully) to give real value to a topic that has been covered many times before in detail.

My opinion is that you should have 2 business plans, one quick one that quickly covers many of the aspects you stated and then later on, if and when the business is working in the field then produce a much more detailed working / mid-term plan combined with what you had learnt to that point. This should then be addressed again as neccesary (say every 6-12 months) or business areas change.

Lastly, staff is very important (not as important as marketing, which is everything!) and you must hire staff for long-term, therefore you must hire the best and brightest that you can, and dont be afraid (encourage) to hire staff that are smarter than you. Hiring cheap staff is not taking your business seriously. If your business is a good one then money is always available.
Andreas Bard on March 12th, 2007 1:18 pm

Thanks for you comments Carl!

I am planning to add a couple of more guides to cover the different parts of this too to make this guide complete.

I really agree on your thoughts on staff, you really got to think about how it will work in the long-run, if you are in it for the future.
Dr David C Payne on October 13th, 2007 3:33 am

I think of a business plan as being similar to a house plan prepared by an architect. Not many people would be brave enough to build a house without having a pretty detailed plan and for those who are brave enough, most of us would say “Good Luck!!”.

The business plan usually covers most of the planned operational activities such as marketing, finance, staff structures, etc., but many believe it should be controlled by an over-arching strategic plan that sets out the overall directions of the business in a very brief “dot-point” format, i.e. provides a “roadmap” that provides a “snapshot” for everyone to quickly understand where the business intends to create its niche and where it plans to go in the future.

On the matter of staff - I would have to agree with Carl. Hire the very best, ensuring that they will have the integrity and desire to support the business and all those travelling with the business. In my own experience, while talent and abilities of staff is certainly important, the personal integrity of the staff and their sincere desire to communicate honestly with all those around them, both internally and externally, is probably more important. Average talent combined with personal integrity will always produce a stronger winning formula for a business than top talent combined with average or low personal integrity.