How to Write a
‘Killer’ Business Plan
Writing a Business Plan can be a daunting task. However, committing time to writing an effective Plan can help improve your chances of success. In this article I will be giving you some tips on how to write a ‘killer’ Business Plan!
writing business plan, how to write business plan
Writing a Business Plan can be a daunting task. You have so many ideas floating around in your head that it can be difficult to capture them all in a logical format. However, committing time to writing an effective Plan can help improve your chances of success. In this article I will be giving you some tips on how to write a ‘killer’ Business Plan!
<b>Tip 1 – Understand the Need for a Plan</b>
Without a clear strategy and long term objectives you may be reducing your chances of success and so it’s important to commit time to plan ahead. Having put in time, energy and resources to come up with the ideas, why spoil it all by not having a structured plan for the future? The benefits of business planning cannot be underestimated. There are some potentially business-changing reasons to prepare a Business Plan. You must view planning as a crucial investment of your time, which could mean the difference between success and failure.
<b>Tip 2 – Don’t Go It Alone, Ask For Help</b>
Picture this. You've never written a Business Plan before; you sit down at your table and end up staring at a blank piece of paper for 3 hours! Then, another 3 hours later, all you have is a bin full of scrap paper. However, in order to help you put a plan together there are a variety of sources of help you can tap into:
• Professional advisers
• Business colleagues
• Advice agencies
• Your staff
• Books (see our free e-book offer at the end of this article)
<b>Tip 3 – Follow a Framework</b>
Having a framework or outline to follow can make the task of writing a Business Plan so much easier. The 3 parts to your Plan are:
• Where you are now
• Where you intend to be
• How you are going to get there
This is your framework which will guide both you and the reader through your business and your idea.
<b>Tip 4 – Tell the Reader Where You Are Now</b>
In your first section you want to paint a picture of where your business is now. These are the main areas to cover:
• Business history
• Location and premises
• Your product or service
• Your market
• Your customers
• Your competition
• Your staff
Provide an insight into each part of your business so that the reader of your Plan knows how the business looks now. Obviously if you are just starting up, give an idea of how you see these parts of your business once you get going.
<b>Tip 5 – Tell the Reader Where You Intend To Be</b>
Having given an overview of your business, the next step is to tell them where you want to be. The main points to cover are:
• Your objectives and goals
• State what you want from the reader – a loan or overdraft for example
• Explain why you need and what it will be used for
<b>Tip 6 – Tell the Reader How You Are Going To Get There</b>
It’s all very well promoting your idea and business but the important point to put over is how you are going to get there. Here are the key points to cover:
• Marketing plan
• Additional resources needed to meet your objectives and goals
• Your contribution in terms of cash or equipment
• Security you can offer to support a request for finance
• Profit and loss and cash flow forecast to show that you plan to make money and that you can pay back the loan
<b>Tip 7 – Provide Some Supporting Information</b>
Your Plan will have contained a lot of information, so it is helpful to include supporting documentation to provide more background. Placing these additional items as an appendix ensures that the flow of the Plan has not been affected by additional information.
• What sort of items could you include?
• Letter of support from your Accountant
• Confirmation of pending orders from customers
• If you are purchasing a property, you could include the sales particulars
• Independent industry surveys showing that your sector is doing well
• If you are buying machinery, include quotations
• If you business’ main asset is you, include your CV!
<b>Tip 8 – Ask Someone to Review It</b>
When you are totally immersed in a task you can easily miss obvious mistakes. Ask someone to review your Plan to ensure there are no spelling or grammatical errors – don’t rely on Spell Check! Does it all make sense? Have you been logical in your arguments?
<b>Tip 9 – Get the Presentation Right</b>
After having spent a lot of time and effort on the content you don’t want to spoil it all with poor presentation! Here are some tips:
• Get the Plan typed; it will make it look more professional
• Make sure all the papers are clean and that there are no dirt marks or coffee stains! Buy some good quality paper
• Purchase a classy folder or binder to put your Plan in (paper clips or staples may not portray the right image!)
• don’t forget to include all your contact details
<b>Tip 10 – Deliver Your Plan to the Reader in Time</b>
Once you are satisfied that your Plan is a good representation of your business you can post it but ideally you should deliver it, at least you know it has got there! Prior to a formal interview (if your aim is to obtain finance) you need to give the Manager time to read your plan. Ask to make an appointment with him in 3 days so he has time to read it.
Enclose a covering letter saying that you have made an appointment and your Plan is attached for him to review and to prepare any questions.
All that remains for you to do is to turn up at the agreed time and present your case!
How to Write a
There are many types of symbols. Money from investors, banks or financial organisations is one such kind of symbols.
There are many types of symbols. Money from investors, banks or financial organisations is one such kind of symbols.
A successful Business Plan (=a successful manipulation of symbols) is one which brings in its wake the receipt of credits (money, another kind of symbol). What are the rules of manipulating symbols? In our example, what are the properties of a successful Business Plan?
(1) That it is closely linked to reality. The symbol system must map out reality in an isomorphic manner. We must be able to identify reality the minute we see the symbols arranged.
If we react to a Business Plan with incredulity ("It is too good to be true" or "some of the assumptions are non realistic") - then this condition is not met and the Business Plan is a failure.
(2) That it rearranges old, familiar data into new, emergent, patterns.
The symbol manipulation must bring to the world some contribution to the sphere of knowledge (very much as a doctoral dissertation should).
When faced with a Business Plan, for instance, we must respond with a modicum of awe and fascination ("That's right! - I never thought of it" or "(arranged) This way it makes sense").
(3) That all the symbols are internally consistent. The demand of external consistency (compatibility with the real world, a realistic representation system) was stipulated above. This is a different one: all symbols must live in peace with one another, the system must be coherent.
In the example of the Business Plan:
Reactions such as: "This assumption / number/ projection defies or contradicts the other" indicate the lack of internal consistency and the certain failure to obtain money (=to manipulate the corresponding symbols).
(4) Another demand is transparency: all the information should be available at any given time. When the symbol system is opaque - when data are missing, or, worse, hidden - the manipulation will fail.
In our example: if the applicant refuses to denude himself, to expose his most intimate parts, his vulnerabilities as well as his strong points - then he is not likely to get financing. The accounting system in Macedonia - albeit gradually revised - is a prime example of concealment in a placewhere exposition should have prevailed.
(5) The fifth requirement is universality. Symbol systems are species of languages. The language should be understood by all - in an unambiguous manner. A common terminology, a dictionary, should be available to both manipulator and manipulated.
Clear signs of the failure of a Business Plan to manipulate would be remarks like: "Why is he using this strange method for calculation?", "Why did he fail to calculate the cost of financing?" and even: "What does this term mean and what does he mean by using it?"
(6) The symbol system must be comprehensive. It cannot exclude certain symbols arbitrarily. It cannot ignore the existence of competing meanings, double entendres, ambiguities. It must engulf all possible interpretations and absolutely ALL the symbols available to the system.
Let us return to the Business Plan:
A Business Plan must incorporate all the data available - and all the known techniques to process them. It can safely establish a hierarchy of priorities and of preferences - but it must present all the possibilities and only then make a selection while giving good reasons for doing so.
(7) The symbol system must have links to other, relevant, symbol systems. These links can be both formal and informal (implied, by way of mental association, or by way of explicit reference or incorporation).
Coming back to the Business Plan:
There is no point in devising a Business Plan which will ignore geopolitical macro-economic and marketing contexts. Is the region safe for investments?
What are the prevailing laws and regulations in the territory and how likely are they to be changed? What is the competition and how can it be neutralized or co - opted? These are all external variables, external symbol systems. Some of them are closely and formally linked to the business at hand (Laws, customs tariffs, taxes, for instance). Some are informally linked to it: substitute products, emerging technologies, ethical and environmental considerations. The Business Plan is supposed to resonate within the mind of the reader and to elicit the reaction: "How very true!!!"
(8) The symbol system must have a discernible hierarchy. There are - and have been - efforts to invent and to use non-hierarchical symbol systems. They all failed and resulted in the establishment of a formal, or an informal, hierarchy. The professional term is "Utility Functions". This is not a theoretical demand. Utility functions dictate most of the investment decisions in today's complex financial markets.
The author(s) of the Business Plan must clearly state what he wants and what he wants most, what is an absolute sine qua non and what would be nice to have. He must fix and detail his preferences, priorities, needs and requirements. If he were to attach equal weight to all the parts of the Business Plan, his message will confuse those who are trying to decode it and they will deny his application.
(9) The symbol system must be seen to serve a (useful) purpose and it must demonstrate an effort at being successful. It must, therefore, be direct, understandable, clear and it must contain lists of demands and wishes (all of them prioritized, as we have mentioned).
When a computer faces a few tasks simultaneously - it prioritizes them and allocates its resources in strict compliance with this list of priorities.
A computer is the physical embodiment of a symbol system - and so is a bank doling out credit. The same principles apply to the human organism.
All natural (and most human) systems are goal-oriented.
(10) The last - but by no means the least - requirement is that the symbol system must be interfaced with human beings. There is not much point in a having a computer without a screen, or a bank without clients, or a Business Plan without someone to review it. We must always - when manipulating symbol systems - bear in mind the "end user" and be "user friendly" to him. There is no such thing as a bank, a firm, or even a country. At the end of the line, there are humans, like me and you.
To manipulate them into providing credits, we must motivate them into doing so. We must appeal to their emotions and senses: our symbol system (=presentation, Business Plan) must be aesthetic, powerful, convincing, appealing, resonating, fascinating, interesting. All these are irrational (or, at least, non-cognitive) reactions.
We must appeal to their cognition. Our symbol system must be rational, logical, hierarchical, not far fetched, true, consistent, internally and externally. All this must lead to motor motivation: the hand that signs the check given to us should not shake.
THE PROBLEM, THEREFORE, IS NOT WHERE TO GO, NOT EVEN WHEN TO GO IN ORDER TO OBTAIN CREDITS.
THE ISSUE IS HOW TO COMMUNICATE (=to manipulate symbols) IN ORDER TO MOTIVATE.
Using this theory of the manipulation of symbols we can differentiate three kinds of financing organizations:
(1) Those who deal with non-quantifiable symbols. The World Bank, for one, when it evaluates business propositions, employs criteriawhich cannot be quantified (how does one quantify the contribution to regional stability or the increase in democracy and the improvement in human rights records?).
(2) Those who deal with semi-quantifiable symbols. Organizations such as the IFC or the EBRD employ sound - quantitative - business and financial criteria in their decision making processes. But were they totally business oriented, they would probably not have made many of the investments that they are making and in the geographical parts of the world that they are making them.
(3) And there are those classical financing organizations which deal exclusively with quantifiable, measurable variables. Most of us come across this type of financing institutions: commercial banks, private firms, etc.
Whatever the kind of financial institution, we must never forget:
We are dealing with humans who are influenced mostly by the manipulation of symbol systems. Abiding by the aforementioned rules would guarantee success in obtaining funding. Making the right decision on the national level - would catapult a country into the 21st century without having first to re-visit the twentieth.
I Don't Need a
Business Plan...Do I?
This is a short article outlining why you should write a business plan to increase your chances of success.
small business business plans, business plan, small business success, reasons to write a business plan
I get asked that question a lot. In fact, after “how do I start a business?” it’s probably the most asked question by new clients. I decided the best way to describe why you might decide to write a business plan is to tell you a few stories about a client of mine. The name and business are fictional. We’re going to call him David and he’s going to have a mechanic shop. The stories I’m going to tell you over the next few months are a combination of things that have happened to me and to some of my clients.
David’s smart. He’s got a memory like a steel trap. And he’s ambitious. He wants to start a small mechanic shop with the inheritance his dad left him, and he’s been very busy trying to get it started. But he’s also young and in a bit of a hurry. The way he sees it, he doesn’t need a business plan and anytime he’s asked about it he just taps his head and says, “I don’t need one. I’ve got it all up here.” Besides, he likes freedom. He’s a fly-by-the-seat-of-your-pants kind of guy. He doesn’t want to be tied to what some piece of paper says.
His mother-in-law, Ellen just shakes her head. She’s owned a bookkeeping service for the last twenty years, which she started because she wanted to be able to stay home when her kids were small. But David thinks, of course she’d see it that way. She’s a bean counter and everyone knows how they are about details. Besides, he’s already let her talk him into incorporating his business. The way he saw it, he didn’t need to waste his money on it, but it was done. No way was he going to waste any more money on getting a business plan.
A few weeks later, David opened his shop for business. What a day that was. He’d been too excited to sleep the night before, and it ended up being an awfully long day because he didn’t have any customers. Not a single one. He’d spent the day cleaning the shop and organizing his tools and sometimes just staring at the phone, trying to will it to ring. Oh well, he thought, what can I expect? The shop’s brand new and nobody knows about it. Someone will call tomorrow. By the end of the week, with no calls except from friends and family (who he was beginning to suspect his mother-in-law had told to call), he was starting to worry. He was also starting to run out of cash.
He barely scraped together the cash for his lease at the end of the sixth month. He didn’t think owning a business would be this expensive. Besides, he’d figured he’d have lots of customers by now, but the truth of it was he didn’t have enough to keep him busy for even half a day. David decided he’d better go see his banker. It shouldn’t be too be much of a problem to get the money, he figured. He had a good credit rating.
David sat down and got right down to business. He didn’t need much money. He figured $10,000 should do it. “Sounds good,” Shaun said when he was done talking. “Let’s take a look at your business plan.” And when he said, “Oh I don’t have one. I’ve got it all up here,” she smiled and said, “We need to have one before we can proceed with a loan. Come back and see me when you do.”
As much as he hated to do it, he knew he had to borrow some money from someone. When none of his friends could help him beyond a few hundred dollars, he approached his mother-in-law. “Well,” she said, “I can do that for you, but I have one condition. I want to give me half an hour of your time to listen to why I think you need a business plan.” David agreed. He was getting desperate.
Here’s what she said:
• Almost half of small business startups fail in the first year.
• The main reasons they fail is because they lack management, lack planning, have insufficient financing and lack marketing.
• You can address all those reasons with a business plan:
o Business plans help with lack of management with financial analysis, guide your decision-making, and outlining specific goals.
o Business plans help with lack of planning by outlining the means to meet specific goals.
o Business plans help with insufficient financing because financial institutions and private investors won’t lend you any money without one.
o Complete business plans include a marketing plan addressing lack of marketing.
• There are other reasons for writing a business plan:
o Business plans help you monitor your progress.
o Business plans give you something to compare your end of period results with.
o Business plans help identify weak areas where you can improve.
o Business plans help you avoid making the same mistake over and over again.
o Business plans help keep you on track.
o A good business plan includes a feasibility study, so you should know before you start whether your business can succeed.
o Many self-help books proclaim goals are more easily met if they’re written so business plans help you identify and reach your goals.
David was convinced. He accepted his mother-in-law’s offer to help him write his business plan. After it was done, he went back to the bank and got his loan.
So, how is David’s business doing? I’m not going to tell you anything today beyond that he’s still in business, but I will tell you more, I promise. We’re going to use David’s business as a case study with more articles about him every month. Stay tuned for more stories about David’s business and find out how he’s doing.