7 Tips For Writing A Start-Up Business Plan

Please raise your hand if you've ever been frustrated about what to put in a business plan? What will convince an investor to give you money? We've all been there. And it seems like the answer keeps changing depending on who you talk to.

The problem, or rather the truth, is that there is no "one fit all" solution. So the bad news is: even a step by step guide to writing a business plan won't really make your plan "good". The good news is, you really don't need a step by step guide to make your plan compelling enough to close investment.

There are many different formats and there really isn't a "universal" length for a perfect business plan. Depending on your product or industry, it can range anywhere between 10-100, and sometimes more, pages.

The question you should ask yourself is: what stage is my company at? If you are already generating revenue and are looking for a second or third round of financing to expand, the business plan can get much more elaborate and detailed, especially on the financial analysis and projections side of things.

But if you are just starting a business, don't have established revenue yet and are simply looking to attract investors to get started making money with your products or services, keep on reading.

Most important to understand in this case is that it all comes down to one simple thing:

telling a great story!

This does not mean you shouldn't present accurate facts, be transparent, and most importantly tell the truth; but it means that you need to package all those facts into an interesting, exciting, and fascinating story so your readers (potential investors) keep on reading and don't get bored by page 25. It's a lot to ask someone to read an entire business plan, so the least you can do is make it fun and interesting.

I have had the pleasure to be on both sides of the table (both writing and reading business plans), and here are the 7 things that are often forgotten or done wrong:

1. Get To The Point Quickly

We all get excited at the prospect of starting a new business... so going on and on about one or more aspects that really cause you to be enthusiastic is great when you sit over a cup of coffee with your friends or colleagues.

But when it comes to reading something on a digital device or piece of paper, without your enthusiastic voice, endless chatter can get old very quickly.

Think of your potential readers as the most impatient individuals you will ever meet. How would you structure your sentences when talking or writing an e-mail to them? Now add just a hint of enthusiasm and relevant information to that, and you should be close to getting their attention.

2. Move Most Compelling Facts To The Top

In addition to keeping things "snappy", prioritizing information and structuring the business plan around the importance of each element can help move the reader along.

The format that I have found to be effective is:

1- Brief Executive Summary

2- Company Description

3- Market Analysis

4- Product and/or Services

5- Marketing Strategy

6- Sales Strategy

7- Company Goals & Objectives

8- Management and Operations

9- Competitive Analysis

10- Financial Projections

Some entrepreneurs include a request for funding at the end, and some create a separate document (mostly with their attorneys) called "Private Placement Memorandum" (PPM). The advantage of not including a funding request in the business plan, is that you can stay flexible in terms of who you are sharing this business plan with and how much money you end up asking for. It's easier to change the short PPM rather than going back into the business plan every time you talk to a different investor.

The main thought behind the structure I suggested above is that every section sets the stage and builds up to the section right after. Again, there are many different formats, and you can really change this format up to whatever suits the story you are telling. You might for example have a big name on your team that has significant weight in your industry, so moving the "management" section up (maybe even to the top) can make sense in some cases. It's all about getting the reader excited, and the prospect of working with a celebrity might just get that job done for you.

3. Create Transitions

This is a mistake I see happening time and time again. Creating transitions between the different sections of the business plan is a really simple trick that makes the overall experience more pleasant, while "tricking" the reader into continuing to read.

Many business plan authors think it's enough to just "compile" all the information relevant to their business in form of one continuous document - no matter how.

The problem, however, becomes that sometimes jumping thoughts can be jarring and confusing.

Go back to thinking about your business plan as a story you would tell around a campfire. You wouldn't reveal the big twist right in your first sentence, would you? And the way that you would go from one character and plot-point to the next, is how you should think of every segment in your business plan.

Don't shy away from creating cliff-hangers at the end of some sections. For example, if your market analysis concludes that one specific age group and gender has an urgent need that no product in the market is currently satisfying, you can end this section with a question like: So how does [your company or product] address this urgent need and turn it into profit? And then go right into your products and services presentation.

4. Don't Be Too Flashy

In my experience, there is a huge difference between sounding professionally enthusiastic and self-promotional. Using too many flashy buzz-words and too much promotional language throughout the business plan can get irritating to read and mostly comes across as insincere. It also raises the question if the authors of the plan are hiding the fact that they might not have figured "it" out yet.

Trying to be flashy simply distracts from the real, hard facts and dilutes the value of your presentation. The old saying, "when in doubt, keep it simple", truly applies here.

5. Use images And Graphic Examples

This speaks to the "making it fun to read" - part. No, no... making it fun doesn't mean making it flashy. It simply means you should also not try to achieve the opposite of flashy - which I believe to be "boring".

Images and graphic examples should be relevant to the information you are presenting. The goal is to give the reader's eyes a break here and there to keep the flow going. Think of it like visual potato chips... but the good, organic kind that is fun to eat, while still staying relevant to your healthy diet. This can include images of your product(s), website screenshots, industry statistics, charts, etc.

6. Attachments

Sometimes there are amazing articles or entire studies on specific industry developments that support your case. Instead of copy-pasting and quoting the entire article, though, attach it to your business plan as a separate document labeled "Exhibit a)", b), c), etc. (one for each document) and reference the exhibit with a short quote or summary inside the business plan. That way you are giving the reader the choice to check out the attachment or to continue going through your presentation.

The goal here is to avoid unnecessary "inflation". More pages is not always better! Sometimes 10 pages that knock it out of the park are better than 100 pages that are overwhelming with too many industry stats and lengthy paragraphs that you didn't even write yourself.

7. Try Putting Yourself Into The investor's Shoes

It's hard, but when reading through your finished business plan, try to distance yourself and read it from the perspective of an investor. Ask yourself very honestly and harshly: would I put money into this? Imagine putting everything on the line; your car, your house, your life's savings.

You would be surprised how many times you will cringe and realize that it's simply not good enough yet; that some of the language you don't even buy into yourself; that you might have to do a lot more research and planning before taking it to an investor. In the end of the day, you are not just putting their money on the line, but also your own time and resources, which could be devastating.

Taking on this outside perspective can be a sobering experience and really help to create an excellent business plan. Check out http://www.investopedia.com - they give great insights into the world of risking money.

So what exactly do you put in each segment of the business plan? Stay tuned for my next article, which will focus on the content and what to include when writing your first and final draft.

For more tips and entrepreneurial discovery of advertising, entertainment, and technology trends go to

http://www.DforDiscover.com

Looking forward to seeing you there!

Article Source: http://EzineArticles.com/expert/Dominik_Rausch/1749820

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9 Key Sections of a Business Plan

You probably know that there is more to starting a business than you initially thought. There are so many pieces to put together, coordinate and do before starting a business. Many entrepreneurs are either overloaded with information or confused as to where to start from!

A business plan is a formal document that put these ideas together in a logical sequence. Just like a blue print is necessary for building a house, a business is the THE first step in starting a business. It is a realistic and a workable plan that outlines various aspects of business including industry performance, market statistics, and financial summary and so on.

Alan Lakein once said, "Failing to plan is planning to fail."

Many entrepreneurs write business plans only when they seek financing or start-up capital for their business. I have always felt that a business plan is an essential document to any business whether or not it is seeking capital. Yes, investors and bankers need a business plan to understand your plan, but more important than that is you being sure as to what you need and where you want to go!

However, in order to write down your business ideas there are several aspects that you need to research upon. Most of this information would be available on the internet or with industry and trade associations. Once the plan is written, it will give you a complete picture of the business including its potential weaknesses, opportunities, strengths, threats, legal and financial considerations and so on. This will help in completely understanding your business and defining its framework before you go ahead and jump into it.

Here, we've summarized the key sections that you'll find in a business plan.

The Nine Key Sections of a Business Plan

1. Executive summary

This is one of the most critical aspects of your business plan. I have seen many clients whose plans were rejected by investors just because the executive summary was not well written. An executive summary is a one (or two) page summary of your entire business idea, the industry, market, competition, management team, risks, financial projections and the implementation plan. Ideally, the executive summary should be written last after the entire business plan (including its financials are ready)!

2. Business/Company Overview

This is the first section of your main business plan. This should start with an introduction and a brief business overview. This should include details on the history of the business, type of entity, mission and vision statement, objectives, ownership structure and a brief summary of the financial proposal/funding request.

3. Products and Services

This section explains to the reader, the products and/or services you propose to sell. Here you need to give the detailed product(s) information, features, benefits, value proposition, competitive advantages, how and where your product/services will be produced/rendered.

4. Industry overview

The industry overview section of the business plan demonstrates the viability of your business idea by discussing the size and growth of the industry. We generally recommend our clients to use the 'funnel approach' when writing this section of the business plan. Under the funnel approach, the industry overview of the entire country is given first, followed by the region/state and then narrowed down to the performance of the industry in the cities/towns where you propose to have the business. Any industry permissions (such as pollution certificates, permits, licenses etc) should also be discussed here.

5. Marketing Strategy

The marketing section of the business plan is one of the most important sections of the business plan. Even if you have the best product in your entire industry, you need to plan on how it should reach the customers and where they are! Here you should describe the target market segment, competitors, and the key value proposition.

You also should discuss what will be your pricing and promotion packages and how these will appeal to the target customers. You might also have to factor in the latest trends such as social media, networking and the mix of each type of these tactics and how they will affect your sales.

6. Operations Plan

An effective management team is the key to driving any business from where it is now to where it wants to go. In this section, provide a profile of your management team, your manpower plan, your production plan, and an overview of day-to-day operations. It is very critical that this section is written well since people will bet on the jockey than bet on the horse.

7. Financial plan

Many entrepreneurs that I have worked with fear this part of the plan and somehow or the other try to avoid it. This is THE most important part of the business plan since investors or bankers will not invest if the business plan is not financially viable. This section should contain financial projections for at least three to five years and should include income statements, working capital statements, cash flow statements and balance sheets.

Many business plans that I have reviewed do not contain an analysis of these financial statements. Ideally a simple ratio analysis, industry benchmarking, charts and graphical representations go a long way in making this section appealing to the investors.

8. Project Appraisal and Risk Analysis

Nine out of ten plans do not have this section. From a readers' perspective I can't stress how important this section of the plan is. This section will discuss the key risks that the business is exposed to and how these risks are proposed to be mitigated. For example, if you are planning a restaurant and assumed that 100 customers will come in everyday, this plan will analyze the sensitivity of your assumption of 100 customers on various factors such as profitability, cash flows etc - What if only 80 customers come? Will I make sufficient profits to repay my loan?

9. Implementation

Again, this is one of the most commonly ignored sections in a business plan. Having read your complete plan, the reader would like to know the next steps in making this business idea a reality. In this section of the business plan, you should discuss the key milestones in the near future, how you are going to achieve them, who (among your management team) are responsible for each of these milestones and so on. This would give the business plan a complete finish from being just a concept to making it a reality!

Kishore is the Principal Consultant of KayOne Consulting and has several years of handholding start ups and helping them with strategic plans and business plans. You can find more information about him at http://www.consultk1.com. He also has his own blog at http://www.consultk1.com where several tips for entrepreneurs are shared. Check them out!

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3 Business Plans Every Entrepreneuer Must Have

I am mentoring small businesses and I am amazed at the ideas I read from the entrepreneurs I have the pleasure of meeting.

Unfortunately, not many have well laid out business plans and most use the Internet for planning.

A big percentage of the documents they use from the Internet are impressive, but what they do not understand is that one cannot use a business plan tailored for another region of the world to fully execute his specific business.

Business concepts are similar universally, but execution and sustainability differ depending on one's environment and market.

The business plans I have read display glorified projections and their market analysis clearly depicts great profit.

In short, one look at a business plan will tell you that some issues have yet to be thought out clearly. For example, competition, risk, challenges and so forth.

Before embarking on your venture, draft at least three business plans.

Individual

This plan is the truest of them all. I refer to it as the naked business plan. It covers almost everything including risk and possibility of failure. No business life lesson can be complete without a discussion on risks and risk management and no business can be started without embracing risk.

Risks are inherent in everything we do - business risk management is the key to ensuring risks are identified and a plan-B or C thought out. Some risks we can control while others we cannot.

This plan should cover who you are as an individual, what your honest strengths and weaknesses are and how you will handle stumbling blocks or closure.

It should address questions like; Can you persevere through tough times? Do you have a strong desire to be your own boss? Do the judgments you make in life regularly turn out well? Do you have an ability to conceptualize the whole of a business? Do you possess the high level of energy, sustainable over long hours, to make a business successful? Do you have specialised business experience?

Financial projections in the plan should cover, at the very least, five different modules. You should work on the plan yourself and get prepared for any outcome.

Investors

I like to call this the headlines business plan. You only have one shot at getting investors - make the best out of it.

This is a plan that shows what team you will be working with and how you plan to invest to make money for investors. Show a well laid out plan that includes short and long term financial gains.

The confidence, coupled with experience, shown in this document will determine whether you get the initial investment you seek.

Financial projections in this case can be three to five years. They are there to show sustained profit. You should not glorify the plan nor try to get a lot of money for the start-up.

You must mention what your competition is and how you plan to create your own niche market - having a business plan that does not have a thorough SWOT analysis could raise the red flag. You might end up not getting financial support.

Pick the right team, get professional advice, try to separate your product from the rest in order to achieve your own niche.

Do not spend too much money. Most people think that having a lot of money is fundamental in starting a business. That is a fallacy - you can make a lot out of very little.

Universal

This is the plan that you started out with - the ''sitting research'' through which you came out with pros and cons of the venture. The plan that has been developed from different Internet searches to better understand what you will be dealing with.

This is the longest business plan. This plan has a lot of data, but you should sieve out information that is irrelevant for your business. Without this plan, it is difficulty to cover everything that needs to be covered in your proposed venture.

Starting a business is not for everyone, but great planning initiated through a solid business plan will always bring in the results.

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