How to Write a Great Business Plan

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So you saw “The Social Network” and it inspired you to start your own mini-empire.

Well first, you’ll need a few items – you know, luxuries like funding, staff, and an office. To get the attention of venture capital types who may fund your new business, you’ll also need a good business plan. But that begs the question: should you write it yourself or hire a professional to do the job?

Here are some pros and cons of both approaches, and some tips if you choose to go it alone.

The one non-negotiable point going into a new business venture is that you do need a business plan. According to a 2010 survey by Palo Alto Software, a business plan doubles your chances of growing your business and getting the financial capital you need to succeed.

The survey offers a convincing case for entrepreneurs to get cracking on a good business plan: Of the 995 business owners with a business plan (out of a total sample of 2,877),

  • 297 of them (36%) secured a loan
  • 280 of them (36%) secured investment capital
  • 499 of them (64%) had grown their business

Meanwhile, of the 1,556 survey participants who did not have a business plan,

  • 222 of them (18%) secured a loan
  • 219 of them (18%) secured investment capital
  • 501 of them (43%) had grown their business

So while you technically don’t need a business plan to make it as an entrepreneur, it sure will increase your chances.

So where to start? You can go ahead and hire somebody to research and write one for you, and there are professional business plan consultants who can do that. Expect to pay a few thousand dollars for it though, and never have one of those content mills write it for you on the cheap. A business plan is the corporate equivalent of putting your best foot forward, so a cheap, ill-prepared, or typo-ridden plan could easily ruin your chances with investors.

If you have any doubt at all about your ability to write your own plan, hire a professional. But whether you write it or not, make sure your plan includes these themes:

Start like a novelist would start a best-selling novel – with a good hook. If you’re launching a new butter churning product, jump right in with a landmark study that shows high demand for making homemade butter in a tough economy. That should get an investor’s attention.

You can then segue into the meat-and-potatoes of your plan, including an executive summary (keep it short and sweet); the reason your company exists (i.e.. to make butter churners in an economic environment where butter churners are in high demand); a clear definition of the product; how you’ll market the product; who’ll run the company (the management team); and an outline of business operations and financial analysis. Here’s a good sample.

As you write your business plan, there’s no need to rush. Your plan not only will wind up being an irresistible siren song for investors, it will serve as your blueprint for your company’s goals and vision. So take the time to get it right. Write in the morning, when you’re still fresh, then step away from it after a few hours every day. Sleep on it, which will bring a sharp viewpoint to the writing process the next day.

It’s good to have a mentor, trusted friend or business colleague review your work also. But ideally you should wait until the end of the first draft to have them eye it. It’s your company after all, and you should keep the first draft to yourself.

The U.S. Small Business Administration offers a guide on writing a business plan as well. Check it out here.

For more tips on growing your small business, check out some winning strategies in this MainStreet article, How to Get Your Product in Stores.

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