How to Write a Business Plan – Dos and Don’ts
A great business plan is often the first step to success for many entrepreneurs and business owners. This is because a solid business plan can lay out the exact plans for how a proposed company will make money. Knowing exactly how a business will generate profits is the single most important piece of information for many companies.
So, here are some of the top do’s and don’ts to consider when you are writing a business plan.
Conduct market research – You will need to conduct ample market research before you even start writing your business plan. This is so that you can identify markets that are growing, and that have large demand.
Explain how your product or service will fulfill the existing demand – After the market research has been done, and an idea for a product or service has been generated, your business plan will need to articulate exactly how your goods or service will fulfill market demand.
Explain how your business will deal with market downturns – Occasionally, the market crashes, or business can slow down for other reasons. These things can be a threat to your business. So, you should include in your business plan a strategy for dealing with these hazards.
Projections – Near the end of your business plan, you should include projections about sales that you expect to make with your business plan. You should justify these projections with data and facts.
Make your business plan overly wordy and complicated – Your business plan should be simple, elegant, and to the point. Making it overly wordy and convoluted can reduce the quality and clarity of the plan.
Overlook blatant flaws in your plan – If you can see obvious flaws in your business plan, then those should be addressed, not overlooked. Otherwise, you may find yourself having to deal with these flaws months, or even years after you have created your business.
Incorporate huge financial risks into your plan – For example, your business plan should not incorporate taking out a $500,000 loan unless you know exactly how you will turn that loan into profits and can get a positive ROI from it. Otherwise, your dream of starting your own business could quickly turn into a nightmare.
Overestimate earnings – If you overestimate earnings, or base them on facts that are unrealistic, then you could find yourself in real trouble, very soon. You may be tempted to be overly optimistic while writing your business plan. However, this will not help you in the long run. It is better to be very, very realistic when you are writing a business plan.
Writing a business plan can be a bit tedious and difficult. However, if you write a sound business plan then you can structure your business around it for years to come. Following the advice in this article can help you to write a solid business plan, and to avoid some key mistakes!