How Business Plans Work

A Few Guidelines

Where to Start

The plan you write will set the scene for your business. You'll set concrete goals that include deadlines, think through your HR organizational scheme and assign responsibilities, as well as describe the business and make your financial projections. One thing to keep in mind before you begin, however, is to set realistic goals. Don't set yourself up for failure before you even leave the gate! Also, make sure your plan is results-oriented. In other words, your plan should influence opinions (even if only your own) about your business and its future. So with that in mind, let's get started.

Pre-Plan Planning

Because all businesses are different, and business plans are written for different reasons, the first thing to think about is whom you are writing for. If you are planning on using the plan to get funding then remember that as you write, being sure to get the business's most important message across immediately. Also, if you're approaching lenders rather than equity investors your projected profits won't be nearly as important. (They often associate high projections with high risk!) Know your objectives and strategies before you tackle the business plan. Remember, your objectives should be specific, concrete, and measurable; and your strategies should clearly explain how you're going to meet your objectives. Finally, keep it clear and concise, and ideally no more than 15-30 pages with attachments. Just remember KISS (keep it short and simple). Once complete, the business plan is something you should refer to often and update and change frequently to meet the changing environment of your business.

Plan Elements

Your plan should include information that falls into these categories:

  1. Your Product/The Business
  2. The Market
  3. Financials
  4. Your Management Team

If you're reviewing many of the business resources available, you'll quickly notice that every business plan outline will be slightly different. Just make sure you cover these basic categories, include an executive summary, and then add other sections that seem necessary for both the audience of your plan and your own personal use.

As we cover the steps in writing a business plan, we'll also write a plan a for a fictitious PDA software company. Watch for links to the fictitious plan at the end of each section. Now, let's go over the Executive Summary.