Seven Preparations for Writing a Business Plan
by Gerry McRae
Writing a business plan is a daunting task. If you do not know that by now,
you will discover that soon after you have read your first set of instructions
for writing a plan. While each of these preparations will require much of your
time and efforts, they will help to make the writing of your business plan easier.
Writing your own plan is best because you probably have superior knowledge
of your product, your target market and your own capabilities. Eventually, when
you are required to defend your plan, you will be better informed of its contents
and its rationale. If you engage someone else to write your business plan, you
will still have to supply much of the following information anyway.
- Enter an outline in your wordprocessor. You can copy excerpts from books,
online searches or pamphlets from government agencies. Finding appropriate content
for your venture could take quite a bit of time. It's a good start for overcoming
inertia, it provides places to record information as it is gathered and your
outline can become your planning and control file.
- Begin collecting contact details for all your references: data sources, business
plan writing instructions, resource persons, online sites, libraries, bookstores,
etc. The more -- the better. Exercise caution if you think your idea is hot for
a local and limited market. Reveal your concept and your research only to a trusted
few. Someone with similar attributes and skills with access to more money could
beat you to an exclusive market share. In my business classes there was always,
at least, one student accepting my offer to submit the weekly submissions in
a plain kraft envelope.
- Establish formats and content for appendices such as floor plans, schedules
and product details that could be time consuming to gather into an appropriate
presentation.
- Gather industry data. Lenders and investors have access to financial ratios.
Ratios are difficult or costly to obtain for some types of businesses. Sample
financial statements are more easily found. So, find several that have revenues
and expenditures similar to your venture and calculate averages for your own
ratios. Gathering extensive marketing information on your potential competitors
and for your target market requires a lot of preparatory work. Your readers will
expect your data to be cross-referenced and full explanations for any abnormal
ranges. If your research requires you to have Standard Industrial Codes (SIC)
get them at http://www.osha.gov/pls/imis/sicsearch.html
or http://www.census.gov/epcd/www/naics.html.
- Perform "what-if" experiments on spreadsheets to find the best
presentations of tables and charts for cashflow projections, break-even estimates,
product life cycle, market segmentation, implementation schedules, training programs
and all the other ingredients ensuring the success of your venture. Accuracy
and readability improve with each reiteration or rewrite.
- Begin your networking by joining and attending appropriate associations and
trade fairs. Ask about or just listen to the many problems being shared. Arrange
meetings with as many people you know who are familiar with businesses similar
to your venture.
- Meet with a lender or investor for advice. Try to determine their expectations
for your venture and for the content of your plan. Ask for any booklets and their
networking suggestions. Do the same with experienced borrowers.
You will appreciate the benefits from your due diligence on these preparations.
May the writing of your business plan be less daunting. I wish I could tell you
it will be a "piece of cake."
Gerry McRae added practical wisdom to his college and univeristy courses by
owning and operating small businesses. That wisdom is now online at http://www.UncleMaxSays.com
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