Pointers on Putting Together Your Business Plan

Ready to start writing your business plan? Here are some basic but essential strategies to keep in mind as you begin putting in together.

Getting started

The hardest part of creating a business plan is getting started. Start with some of the easy steps first. Describe your business and your product or services. Talk about the market you are targeting. And explain what stage of development your company is in. If you get hung up on a particular part of the plan, skip it for now and come back to it later. Don't worry about making a perfect first draft -- just get some thoughts down to get the process going. You can always polish it up later.

Keep in mind your audience

While writing of your business plan, keep in mind your intended audience and why you are writing the plan. For example, if you are trying to attract equity investors, you will want to emphasize the big upside profit potential. At the same time, you need to be especially careful to adequately disclose the risks and uncertainties in your business because investors often look for someone to sue if their investment disappears. If you are trying to get debt financing, you want to emphasize not the huge upside profit potential but the certainty that the debt can be repaid. In fact, talk of big profits may scare away debt financiers because high-profit potential usually means high risks.

Think competitively throughout your plan

In today's crowded marketplace, you're probably going to have serious competition, no matter how creative your business concept is. That is why you need to think competitively throughout your business plan. You need to realistically identify where you will do things in similar manner as your competitors, where you will do things differently, where your strengths and weaknesses are. To try to run a major aspect of your business significantly better than your competitors may be a difficult challenge. Hence, it is often better to focus on planning on being different from your competition and competing with them less directly. Can you find a particular market niche to focus on? Can you find a unique strategy? Can you position your products differently? Can you use different sales or marketing vehicles?

Don't overreach with your business plan

A lot of business plans sound good on paper but don't work in the real world. It's difficult to attract people to a new product or service. Just because it's better doesn't mean people are going to switch to it! People or companies have established buying patterns and are currently doing business with someone else. To get them to do business with you, you need to do more than simply attract them to your business. You have to take them away from someone else's business. It's also quite possible that when you enter the marketplace, your competitors may react with their own new products or services or by cutting their prices. And while it's easy to overestimate sales projections, it's just as easy to underestimate costs -- especially for a start-up. There is always going to be a hefty amount of cost overruns, expensive problems, and items that you simply overlooked. So forecast conservatively and try to have some extra cash in reserve.

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