How to Write a Business Plan in 10 Steps

One of the first steps to starting a company is writing a business plan. Because a business plan is so important to your business's initial success, you need to include everything a vested reader will want to see. But it's not so complicated of a document to write that we can't explain to you how to write one in ten basic steps.

Who Is Your Audience?

Anything you write will appeal to a certain audience, and your business plan is no different.

If it is for investors, skew it to their interest. Explain why they should put their money into your business. Research your investors, as well. Are they an angel investor or venture capitalist? Are they interested in what your business is about? Knowing these things will help you drop in key terms to capture their attention.

A business plan isn't always written for investors, however. You could be crafting a document that sells the vision and mission of your company to prospective employees. You would word this plan differently. It is, therefore, important to understand your audience(s) before you start writing.

Writing the Business Plan

1. Cover Page

Just like those essays you used to write for school, you'll need a cover page for your business plan. Include your logo, the title of your plan, business name, contact information (including address), the date you completed the plan, and a confidentiality statement.

Your confidentiality statement needs to state that they should not share the business plan with a third party, nor should it be reproduced.

2. Introduction

Now it's time to set the scene. Write a detailed overview that includes your business's name, its purpose, and your target market. You should also explain your sources of revenue and anticipated funding. Your introduction should be no more than a page. Keep your words simple and professional, and sentences concise.

3. The Executive Summary

Consider this page a summary of what your entire business plan is all about. Some investors may not have the time to go through your entire document, so this page should give them a pretty good picture of your business and all the important numbers. Make your business sound like it's too good of an opportunity to pass up.

4. The Strategy, Mission, and Vision

Now, write your vision statement. A vision statement answers the who, what, why, and how of your business briefly. It should only be about a paragraph long.

On a new line, write your mission statement. It will be shorter than the vision statement. It should state your business's intent and how it accomplishes this intent.

Present your strategy, as well. How will you get your business to head in a certain direction? State briefly how your team plans to lead your business.

5. SWOT Analysis

A SWOT analysis lists the key strengths, weaknesses, opportunities, and threats that will affect your business. You will typically create a SWOT matrix (a table with four separate headings) and brainstorm with your team. Format a clean, typed version of your matrix for your business plan.

Explain how you came to your conclusions. Even though you want to highlight your strengths and opportunities, part of being a good business owner is knowing where you lack. Providing those who read your business plan a thorough SWOT analysis will show them that you understand the business market that you are going into. A potential investor will see that you are not going into the business blindly.

6. Marketing Strategies

After identifying your strengths, weaknesses, opportunities, and threats, present a marketing strategy to address each issue. A marketing strategy outlines how you will stand up against the competition and break into the market. You also need to write a well-thought-out marketing budget in this section of your business plan.

7. Business Structure

No matter what your venture is, you need a business structure. A business structure determines how the IRS will treat you come tax season and what should happen in case of legal issues. The common structures are Sole Proprietorship, Partnership, and Limited Liability Company (LLC).

Once you have established your business structure, write in your business plan:

• The rights of each team member/investor and their positions
• Management style
• Communication chain
• Process for filing customer complaints

...and whatever else is relevant to your business structure.

8. Operational and Management Plan

The operational plan will give a detailed account of how you plan to carry out your daily business. It also gives details such as where your business's address, its infrastructure, your supply chain, methods of distribution, and quality control.

Your management plan goes into detail about each team member's role. It also includes the cost of running the business via the management team. Be sure to list the board members, any advisory team that will oversee your business and their remuneration.

9. Conclusion & Exit Strategy

This part of your business plan should summarize the highlights of your plan. Should anyone skip right to the last page -- and they very well may -- you need to give them a decent overview of what the business plan covers. It should also include an exit strategy for your business if things fall through with a partner or you decide to shut down your business. Investors are just as interested in your exit as they are in your entrance.

10. Review

Review your plan thoroughly. Consider having someone read it through and give you recommendations for edits. Take this feedback and make amendments.

The more organized your business plan, the better you and your audience can visualize your business. It may seem like a bother to put together, but it is a key document. Take it step-by-step. Soon enough, you'll see that it's all ready for you to present!