Copyright 2004 Vishal P. Rao
You have an idea for a business. You know what you want to sell, who you can sell it to, and how much you stand to earn from it. There's just one more thing you need: a business plan.
Many people dread idea of preparing a business plan. They think of them as complicated, unnecessary documents that exist only to make it more difficult for them to get started as an entrepreneur. They are wrong.
Business plans are necessary because they help you "see" your business. Instead of just talking in abstract ways about your "customer base" and your "profit potential," it lets you put those things in writing and in concrete terms. It forces you to think through every aspect of your business in advance so down road you don't realize you've made a mistake that's cost you your business, your life's savings, and your job.
Besides all of that, they are also important tools for getting other people interested in your business. For one, if you've taken time to create a business plan, others will realize that you are serious about this endeavor and that it isn't just some pie-in-the-sky dream. A business plan also shows people that you are a professional and that you understand what it takes to start and manage a business. This is all extremely important, particularly if you need any type of outside funding, such as loans or investors.
So while bad news may be that you definitely do need a business plan, good news is that they don't have to be complicated. The truth is that your plan only needs to cover seven main areas and none of these areas are going to require you to write a full-length novel. These five sections are executive summary, company overview, business environment, company description, and action plan. All of those sections may sound complex, but most of them won't involve information that you don't already know.
Even though this section will technically be first in your business plan, you should actually write it last because, just as its name implies, it summarizes entire contents of your business plan. Because many readers never bother to get beyond executive summary, you must make sure that it is comprehensive and well-written.
If that sounds difficult, it isn't. Just make sure to read through your entire business plan before you start writing executive summary. Make a list of information that you think is most important or that would really stand out to a reader, and be sure to include all of it in your summary.
This section explains guiding force behind your business. It gives them a chance to see what you have in mind for business and how you plan to get there. Generally, overview does this by providing a mission statement, goals, and objectives for your business.