Writing a Business Plan – A How-To Guide

Lots of people want to start their own business. One of the first things that stops these would-be entrepreneurs from realizing their ambitions is the seemingly daunting task of writing a business plan. Writing a business plan, though, is a rather easy task if you understand your business, so let’s take a look at what a business plan entails.

Before we jump into drafting our business plan, we should think about why we are writing a business plan in the first place. Most business plans are used to secure financing for a business – whether it be a start-up or an existing company looking for additional capital. This financing could come from a bank, an equity or venture capital fund, friends, family or just about any other potential investor you could think of.

Another reason to write a business plan is to organize yourself, make sure you have thought through all the components of your business and make sure that it makes sense. A great idea for a product or service may not amount to a great business unless you can turn a profit through effective marketing, management of expenses, management of accounting and information systems, etc.

Things to Keep in Mind

As you write your business plan, keep in mind that your audience – whether you’re currently looking for financing or not – is likely to be a potential investor. You need to communicate to investors that your company understands its business and has thought through all the risks, challenges and opportunities involved in its industry.

To communicate this understanding to investors, you should try to provide sufficient detail about your business to demonstrate your knowledge. For example, you could write something like this: “According to the ABC Trade Association, profit margins for our industry average around 25%. With the procedures we have put in place, our business can achieve 30% margins due to the increase in our operational efficiency.”

There is no hard and fast rule for where or how you should add these kind of details, but using them will improve your credibility as a company.

You should also pay attention to your writing style. There is nothing to be gained by using fancy vocabulary or flowery language. In fact, such writing may cause your audience to lose sight of your business. Instead, you should write clearly and to the point so potential investors have a clear understanding of how you run your business.

The Outline

So with these ideas in mind, how should we structure our business plan? Below is one example of how a business plan can be structured. This outline contains the most commonly-used sections of a business plan but is by no means exhaustive of the areas that a particular business might need to cover.

Executive Summary
Business Highlights
Operational Overview
Market Overview
Management & Personnel
Financials
Appendix

The executive summary of your business plan should be a two to four page summary of your business plan. It should touch briefly on each area that is contained in the rest of plan and give the reader a good sense of your business even if they don’t have time to read the rest of the document. You may also want to touch briefly on the history of your company and its mission and values in this section.

Hitting the Highlights

Next it’s good to jump into the business highlights section. This section discusses what sets your business apart and what will lead to its success. You may want to highlight the experience of your management team, discuss the strength of your position in the market or any other factors that make your business competitive.

You may want to follow this section with a discussion of risk factors coupled with how your business mitigates or addresses these risks. Discussing risks is another opportunity to demonstrate that you understand the business and industry that you’re in.

Getting Down to Business

The next section is a discussion of the operations of your company. The operational overview is usually the longest section of a business plan and usually covers the business strategy, marketing strategy, the product or service offering, management and information systems and any other components that are important to the operations of the business.

An industry or market overview is also a helpful section to have. It will give potential investors who are not familiar with your particular industry or market a better sense of the environment in which you operate.

This section may include demographic information for the market where you sell your products or services. It may include a discussion of the regulatory or legal environment for your industry. You can also include some general statistics on the industry from a credible source such as a trade association. This will lend credibility to some of the assumptions in your financial projections in the next section.

The Bottom Line

One of the last sections in a business plan is usually the financial projections. Ironically, this section might be the section you want to start with when writing your business plan. Building a financial model for your business is one of the best ways to make sure that you’ve thought through all the basic components of your business and that it will eventually make money.

You’ll have to ask yourself several questions in the process: What are my start-up costs? How will my marketing strategy translate into revenue growth? What are my gross margins? What are my fixed costs and overhead? When will I break even? How much money will I need to raise to get started? What will my interest expenses be?

Your financial projects should consist of income statements and balance sheets. A good rule of thumb for a start-up is to show monthly income statements and balance sheets for the first two years of operations and then full-year projections for at least the first five years of operations. Depending on how long it takes your business to reach a break-even point, you may want to go out to ten years.

In addition to these financial projections, your financial section should include a discussion of your assumptions, an estimate of when your business will begin to turn a profit, key margins that you believe your business will achieve, etc. If your business is already up and running, you should include the past three years of financials instead of projections. If you have less than three years of data, you may want to forecast a few years out as well.

Finally, you may want to include an appendix where you can share additional data. You may want to add a few news articles here that highlight how quickly the economy in your market is growing. You may have some news articles on your business itself. Perhaps you have financial statements for multiple business locations that would provide more detail about your business.

How Long Should It Be?

The length of a business plan may vary depending on the type of business that it is, whether or not the business is already operating and what the business plan is to be used for. Some businesses may need a lot of technical description in order to effectively communicate how they will operate – and others are more simple.

Businesses that are already operating will be expected to provide a lot more details about their business such as the kind of accounting software they use, where their company is physically located, pictures of products or facilities, actual financial results, etc.

If a company is simply trying to organize its business and is not looking for investors, they may be able to get away with less details in their plan – although they may seek to dive into greater detail than investors might need.

A typical start-up business plan should probably run about 15-20 pages, though depending on the circumstances mentioned above, it could run a little shorter or quite a bit longer.

Setting Yourself Apart

On a final note, if you’re going to start your own business, you are going pro – and you should act like it. By all means, make your business plan looks professional. It should go without saying, but carefully read and edit your plan several times before sharing it with outside parties.

You may want to consider developing a logo for your company if you don’t have one already. Use pictures of your company or the products that it sells to break up the text of the document and engage the reader.

Again, these may seem like minor details, but sometimes a business plan may be the primary document a bank underwriter might have to go on as he or she is evaluating the credit quality of a loan application.

Need More Business Leads? 10 Marketing Tools to Pump Up Your Numbers

Business growth doesn’t just occur; it is built through continuously seeking new business leads and productively converting them with effective marketing tools. Careful and thorough marketing and aggressive execution will provide a business with leads, sales and profits.

For a business to grow, it needs a steady flow of new business leads.

However, more often than not, established businesses will rely on just one source for leads because they witnessed some success from it in the past. This is a risky choice for any business to make because this source of lead generation could fall off or you could find sales aren’t continuing to grow.

In order to avoid this occurring with your business, now is the time to work aggressively to increase your list of business leads. By doing this, you will not only notice a more stable flow of business prospects, but should one abruptly dry up, you will not be left high and dry.

Here are 10 marketing tools you can use to generate prospects:

1) Self promotion: Speaking at business venues, networking meetings, trade shows and other related events can be a great way to meet some new business people, gain some new leads and also get comfortable promoting yourself in person.

2) Set up a business website: As we rely more heavily than ever on information technology, businesses are scrambling to get themselves online. A website for your company will not only help make you well known, but can also build prospects, induce quick sales through e-commerce sites and through content promotion and ads.

3) Learn to network: Networking can be achieved both online and offline using websites such as Facebook and Twitter which allow you to link exchange; and in person through special networking events. Either way is effective, but offline methods allow you to put a face to the company name, helping to build stronger business leads and relationships.

4) Advertise: For a business to succeed, prospects obviously need to be aware of that business first. Marketing and advertising can be expensive depending on your niche but they are a necessity to secure the future of your firm. Using online or offline methods of advertising, you can grow interest about your business, encouraging new business leads.

5) Look to your existing client list: Some businesses may look to obtain new business leads by renting or exchanging their existing client list or by running joint venture promotions. You can also obtain new leads through your existing clients by keeping up to date with them, notifying them of new products/services and ensuring that they do not require any additional services from you. Following up a sale is often the most effective way and the optimum time to gain further sales and leads.

6) Media interest: Depending on your business’ location, your current reputation and your financial situation; you could look to expose your business through different forms of media. Local newspapers, magazines, radio stations and even TV advertisements can help your name be exposed to a larger volume of people, helping to increase your business leads and brand awareness.

7) Affiliate partners: Affiliate partners can help increase your leads. These partners will work by promoting your business to their current clients for a percentage of your sales. As you complete the sale, their customer also joins your ‘list.’

8) Make your promotions known: Promotional material such as newsletters, email campaigns and even article marketing campaigns are a great way to notify prospects about any new promotions you may have. If they feel you are offering something exciting, they may even forward your message to a peer or associate, providing you with some viral marketing which could also bring in new sales.

9) Incorporate Search Engine Optimization tools into your online marketing campaigns: Using internet marketing tools to promote yourself through your website, articles and so forth is a great way to gain traffic and sales, but without taking Search Engine Optimization into consideration, your website simply will not be found. Think about relevant keywords which relate to your business and incorporate them into your web content and promotional material to help you perform high in search engines and encourage increased traffic and sales. Add your content onto blogs, article directory sites and incorporate one-way link building to help you position higher on search engine rankings for your targeted keywords.

10) Re-evaluate your marketing and advertising strategies: As your efforts gain you new business leads, rather than stepping back and reveling in your success, it is important that you use marketing tools to frequently analyze your performance and look at new ways in which to further increase the number of business leads you have.

Whether you have already achieved a great deal from successful business lead generation or you are struggling to get a handle on how to obtain some leads, attacking this task from all angles is the best way to gain as many business leads as possible. With a range of online marketing tools at your disposal, you will not only see an increase in your business prospects, but an increase in your sales also. All it takes is a little thinking, a little marketing and a lot of drive.

Home Business Effective Ideas

There are many benefits you can get in home business and also disadvantages. But as you get along with this kind of business you will say that “I am contented enough of doing this.” Being a boss in a certain business is the greatest achievement I would like to do. But at first it is not easy to run it especially if you have only limited knowledge about it. Learning and experience working at other home business before you get started is really a perfect idea in running the home business.

Even if working from home is a great source of income, not all people are given a chance to have it. But why don’t we try? It will not hurt you so much just like traditional business when you fail to do it. As technology is improvising higher and higher then it will be a big help to you in running this home business.
As starting home business is not that easy then you must plan everything and compress all necessary tips and ideas because in some consequences you will going to use it. Although starting any business is too risky then nothing to worry because you are ready enough to face all problems you might be encounter. In order to grow the business you will not just only satisfy on what you are earning recently. You have to work more and thinking more ideas on how to earn great income. You also focus and give enough time in working it because by that you will be able to know some new strategies and techniques for a better application. Cooperation to all household members is also important especially avoid making any disturbance during working hour.

In addition, You will need to have time management. Organize time wisely in both work and family. As well as the working place just like looking for a perfect part in the house that you can put your work safely. Much better to have a peaceful environment because you can work peacefully and even making ideas that could help your business improve.

Again, plan everything makes you succeed. You will fail if you are too much excited in starting home business without thinking of any plan. There are many steps that must be followed when you starting the business. Hope these steps will help and enhance your skills and improve your knowledge.
Essential Steps in starting a home business:

Find a mentor

Try to take the assistance of a mentor who will assist you in the long run home business. If you take the help of mentor, you will have lesser chances of failure and this will provide guidance to you while working your way through different steps of business ownership. Someone who is business proficient, pretty supportive of ideas and designs can be considered as the appropriate choice for mentor.

Business financing

Most home businesses involve some form of financing; no matter how small is the start-up cost. There are lots of things to consider with your financial plan. Even if you are working online you have to expend amount like buying some equipments in helping run the business.

Protecting your business ideas

Protecting business ideas come really important. There are very few new home business ideas. Most ideas are just a twist to an already invented idea. On the other hand, designing a business structure matters a lot. The business structure you choose matters a lot in the case of filing your taxes every year. Most likely you will like to file as a sole proprietorship. However, it is suggested to look into your options to decide exactly which structure best you particular type of home business.

Popular products and services

You must determine first what products or services are popular today. You can deal easily those items if its very known to the public. You can also make your own products and make it very unique and also be productive.

Dedicate Time To Learn About The Internet

The first thing that you have to do is to dedicate time to learn about the Internet. It is very important to learn about the Internet and how to navigate it in order to take advantage of the many opportunities that it offers for starting a small business from home. Obtaining the necessary knowledge on how to use the Internet to your advantage is going to be essential if you want to be successful.