Writing a business plan isn’t easy. Hell, as someone who has done it a few times, it’s downright a pain in the ass. Where to start? How should it look? Is there such a thing as a perfect business plan? All these questions will undoubtedly creep into ones head as he or she drafts one up — with many first-time entrepreneurs unsure of where to begin.
As awful as doing a business plan might seem, even if you’re not thinking of starting your own business, putting one together will help you understand all of the aspects of launching, running and growing a small business.
This has two benefits.
One obvious benefit is that writing a business plan can make it easier for you to decide whether or not you ever want to start your own business someday. Even better, who knows, maybe you’re one of the lucky ones who completely nails the plan, leading you to finally starting a company right now.
Before just diving into the deep end and putting your idea on paper, there are probably questions. That’s why helpful tips below will describe some of the benefits of creating a business plan, as well as give a checklist of things to include.
It Helps Create More Career Opportunities For Yourself
There might be a day when you run into someone who believes in you, likes your idea and wants to invest into that business you’re interested in starting. Or, you might have an opportunity to buy an existing business and get a loan from your bank. Either way, it’s critical to have a business plan that outlines the strategies you want to do with a company. If you can’t show potential investors or lenders that you’re serious about starting a business by showing them some numbers and other information regarding the launch, you’ll probably lose out on following your dream opportunity.
You don’t need a 100-page, detailed business plan to know whether or not your business idea will work. What you do need is something detailed enough for others to look at in order to see the vision of the company. It will help others gauge whether it’s a realistic idea that’s worth helping start.
A Business Plan Makes You Think Like An Executive
The more you understand about how businesses run, the sooner you’ll be able to prepare yourself for a management, and just maybe, and executive-level position. That’s why diving into a business plan can be helpful for your career path, too.
For example, if you think marketing is advertising, public relations, social media and events, you’re not C-suite material. Marketing is product, price, place and then promotion. Writing a business plan requires you to take a look at all of the “Four Ps” of marketing and understand them.
Putting together a plan helps you understand why executives and managers not only make decisions to do things, but why they make decisions not to do things, too. See, just writing one yourself is a crash course in business management, and that’s pretty damn cool.
What’s In A Business Plan?
Remember, no need to stress yourself out here and just fill pages to show more words. Business plans should be concise, but they need to be to the point, too — which is why they can be tricky.
The format for a basic business plan will follow this outline:
- Cover Page
- Contents Page
- Executive Summary
- Information Sections
- Key Players
The executive summary should be a brief (half-page) overview of the entire plan, telling the reader what’s to expect inside. You’ll basically describe your business idea, state why you think there’s a need in the marketplace that will make the product or service a success, and then show the profit potential.
No need to give any detail in the executive summary; that’s what the information sections are for. The first section is basically to tell the reader, “Here’s my idea, it will be successful for these reasons, and here’s when and why it will be profitable.” Remember, there’s also free resources online to get you started.
Here’s a breakdown of what the information sections should cover:
- Business Overview. Provide the product or service description. Include any features that differentiate it from the competition and include its unique selling structure.
- Marketplace Overview. Who’s the competition? Who are the buyers? Why’s there a need for this product or service category?
- Marketing. Discuss your pricing strategy, how you’ll distribute it, where you’ll manufacture the product and how you’ll promote it.
- Financials. What will it take to set up the company, launch the product or service and operate the company until it’s profitable? Layout timetables for setting up the business, launching, breaking even, becoming profitable from sales and paying back the initial startup expenses.
- Key Players. List the main people who will be involved in the project, including each of their background, any support staff and contractors, and the vendors and suppliers the business will use.
- Summary. Restate the executive summary using a bit more detail — like financial numbers — to support the business pitch.
- Appendix. This is where you can include detailed documents, such as an annual budget, key player’s biographies, charts, graphs, pictures, etc.
How Long Does It Take To Write A Business Plan?
Depending on how detailed you get, it can take months to write a business plan in your spare time. For a basic draft, all it takes is a weekend, assuming you work on it for about four hours each day. Either way, when complete, make sure to check SCORE to see how the plan stacks up.
The good news? You never have to spend more than 30 minutes at a time working on your plan. You can create your outline one Sunday evening when you have free time. You can write the executive summary one evening when there’s nothing good to watch on TV. You can do 30 minutes’ worth of Internet research at a time to get ideas for each section.
If you like writing, you can finish the bulk of your plan in a weekend. If you hate writing, you can work on your plan a section at a time throughout a year. It’s really up to you, but, remember, just because you have a finished business plan doesn’t mean you have to start a business — it’s not like the idea is going to expire.
Most people might not think, “hey, I want to write a business plan just for the hell of it.” But the next time you’re looking for something to do — and want to learn more about the ins and outs of what makes a company run, it might be something worth doing. Who knows, the idea could lead to a full-fledged company one day.