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Business Plan Writing For Beginners
Before entrepreneurs can create a business, they must create a highly detailed plan that explains the why, how, and when an enterprise intends to achieve its projected state of profitability. Business plans act as a blueprint to establishing, marketing, and operating an enterprise. Successful entrepreneurs understand the importance of creating an effective business plan transposed in writing. An effective business plan entices prospective lenders or investors to offer financial contributions for the success of new and established enterprises. It suggests how the owner will manage the business; therefore, instilling confidence in lenders to offer funding and human resources at the operator's leisure.
Entrepreneurs can compose a plan in their own way; however, many have adopted a structure that has become accepted as the standard for business plan writing. Business plans have certain key elements that describe the what, where, why, how, and when of the economic success of the proposed enterprise. Each business plan differs in its length, content, and format due to the varying complexity and nature of the venture. Entrepreneurs should write their business plan by injecting every bit of professionalism as they deem necessary to make it a valuable asset to the operation. Business plans should look professional and appeasing. Entrepreneurs should write their business plan clearly, and organize it logically.
Business plans typically have four sections, including a description of the business and its environment, a historical overview, financial projections, and the appropriate documentation to support the claims therein. Each section should complement the next by flowing freely with each other.
The business description should provide an overview of the enterprise and its objectives. Readers will want to know why the business should exist. The writer should convey this message in the mission statement, or the beacon statement of the entrepreneur's venture. It states the purpose, business, and values of the proposed operation. After the mission statement, the writer can further elaborate on the current state of the business. This may include its legal structure and the identification of its principal owners. It also explains the products and services that the business will offer for sale.
The marketing analysis of the business plan attempts to explain the marketing strategies to reach the target market. It explains the market's characteristics, target customer's profile, and methods for out doing the competition. The marketing plan usually addresses four areas, including the product or services offered, prices charged, means of distribution, and promotions.
The operational section of the business plan provides an overview of how the business owner intends to operate the enterprise. It explains the internal organization, structure, operation, and equipment needed to produce the necessary goods or services for the target customer base. The business owner should discuss how he or she intends to manage the operation's personnel, resources, and legal issues that arise.
The financial aspect of the business plan propositions new investment opportunities. Entrepreneurs provide an estimate of the enterprise's profitability. It presents the current financial status of the business while providing projections for future growth. If the purpose of the business plan actively seeks lenders or investors, then discuss the type and amount of financing needed to become a thriving venture. A solid financial plan provides financial projections extending two to five years into the future. New establishments should provide monthly forecasts for the first two years and then quarterly after the three-year mark. Estimate monthly cash flows, year-end balance sheets, and break-even analysis.
The executive summary highlights the key points addressed in the business plan. It consists of short and concise details covering the mission, goals, product or services rendered, market potential, marketing strategies, management team, and financial projections to make it a longstanding venture. The executive summary refreshes the reader's mind and gives one last shot to persuade lenders and investors to consider their position on the business.
Follow these links to learn more about creating an effective business plan for aspiring entrepreneurs:
- Inc.com: Building a Business Plan, Section by Section
- How to Write a Successful Business Plan (PDF)
- Small Business Administration: Creating Your Business Plan
- Writing a Business Plan:An Example for a Small Premium Winery (PDF)
- Business Planning Papers: How to Write a Business Plan
- SCORE: Developing a Business Plan
- Business Plans Made Simple: A Step-by-Step Guide to Writing a Business Plan (PDF)
- Renaissance Entrepreneurship Center: Writing a Business Plan
- The Elements of a Business Plan (PDF)
- Entrepreneur.com: Business Plan Guide
- Microsoft's Business Hub: How to Write a Business Plan for Emerging Entrepreneurs
- My Own Business: The Business Plan
- The Guardian: Top Tips for Writing a Business Plan
- Huntington.com: Writing a Business Plan
- Why Should You Create the Written Business Plan?
- Your Business Plan Resources (PDF)
- Scotia Plan Writing for Businesses
- Business Plan Writer
- How to Create an Effective Business Plan
- Business Plans -- How to Write an Effective Business Plan
- Business Plan Development
- How Entrepreneurs Can Create Effective Business Plans
- Get Help with Business and Marketing Plans
- Business Plans and Profiles Index
- Organizing A Business Plan
- Millsaps-Wilson Library: Business Plans
- A Business Plan for a Startup Business (PDF)
- A Business Plan Guide
- A Planning Guide for Established Businesses (PDF)