1. Start with an outline
Many business owners put off writing a plan because it seems so overwhelming despite the fact that most business coaches think it is a good idea. By starting with an outline that is focused around key elements (such as finance, operations, management and your market), youll be able to expand on each section and see the whole picture, without getting bogged down in one area.
2. Cover the essentials
Make sure your business plan includes all the information a bank or potential investor will want to know. This includes the history and current ownership of your business, details of the products or services you offer and key skills within the management team. Information on your market (including competitors and customers), plans for growth and financial details and projections should also be included.
3. Keep it short
The length of business plans can vary hugely from a few pages to more than 30, but a good starting point is 10-25 pages. Separate it into clear sections and include headings, subtitles and short paragraphs in order to make it easy to read. It may take several edits to get to a finished version.
4. Include an executive summary and an appendix
Many experts believe the executive summary is the most important part of a business plan as banks and investors often make their decision based on it. It should summarise the plan and give an outline of the different areas covered. If you want to include a lot of detail in your plan - but dont want it to look overcrowded - use an appendix at the back. This can be used for CVs of your management team and any tables and graphs referred to in the text.
5. Write it for your target audience
When compiling your plan, bear in mind who its aimed at and include relevant content. If you are writing for a bank, theyll want to know the risks involved in lending you money and how long it will take you to pay it back. Meanwhile, a potential investor may want more information about your company and the market they are investing in, as well as their return on investment. This doesnt necessarily mean writing several plans, just tailoring it.
6. Do your research
Research is a crucial part of writing a business plan. This includes having a good knowledge of the market you are operating in and any existing competitors and market trends. You can do this by reading relevant books and trade journals as well as speaking to customers, competitors and suppliers.
7. Be conservative with financial projections
Its always best to err on the side of caution when writing financial projections such as sales and profits - and avoid being too optimistic. Because of their experience, banks and investors are likely to be able to tell if you are overestimating and this could work against you. If you dont feel confident about doing this yourself, work with an accountant to develop realistic projections.
8. Be realistic and honest
Be realistic about your resources and your limitations. Assess possible problem areas and identify things that may go wrong such as under achieving on sales or staff leaving - and factor these into the plan. A risk assessment is an essential part of a business plan, and by addressing these problems upfront, youll appear more ready to face them if they happen.
9. Support every claim you make
When you make a claim, back it up with solid facts wherever possible. If you think you will capture 10% of the market, explain why and how you will achieve this, such as details of your sales and marketing strategy. If you are a new business and havent yet got your own performance figures, give an example of similar businesses and details of the market.
10. Check it
Check your plan for any typos, grammatical errors and spelling mistakes. Read through it and see if its written in plain English, avoiding jargon or technical language. Finally, get your friends, colleagues or an expert to look over it for you. Its vital that your plan looks professional and well prepared in order to make the right impression.