A business plan is a written document that describes the nature of your business and the product or service you intend to provide. It should include an executive summary; descriptions of your marketing strategy, management team and financial plans; and supporting documents such as tax returns, cash flow projections and lease agreements, etc.
Many books and online articles offer step-by-step instructions for putting together a business plan, and you would be wise to consult them for specifics about form and content. In the meantime, however, here are five tips to consider as you get started:
1. Choose a flexible format. Business plans should be easy to change as new facts emerge and early ideas are rejected in favor of better ones. Use 8.5" x 11" paper and package your plan in a binder that allows you to add, subtract and revise as needed.
2. Be thorough but concise. Tell your business story clearly and concisely. Potential investors want hard facts not fancy language.
3. Do your homework. Business plans are often used to attract investors and secure financial backing. Prove that you’re worthy of their consideration: identify your target market; tell how your product is unique or how your service differs from the competition; provide details about your competitors’ strengths and weaknesses and estimated market share.
4. Turn features into benefits. Potential investors want to know “What’s in it for me?” So tell them. Focus on benefits rather than features, and use facts to back up your claims. Instead of “ABC product is priced significantly less than its closest competitor, XYZ,” try this: “By pricing ABC product 20% below XYZ, we’ll turn a quicker profit and you’ll recoup your investment within six months.”
5. Make it personal. Introduce your management team. Describe their previous accomplishments and show how they’ll bring their talent to this new venture. And share your plans for attracting additional high-quality personnel as your business grows.
The SBA’s Business Plan Tool provides you with a step-by-step guide to help you get started: www.sba.gov/tools/business-plan/1
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