Tweet

Write an Effective Business Plan in 3 Easy Steps

Guest post by: Anne Bachrach

Article Overview: The key is to create not just another business plan, but an effective business plan that inspires you, and others, to take action. Traditional business plans can be very dry and uninteresting, so you are about to learn how to create an effective business plan that not only gets you excited, it will inspire you, and others, to take action.

Write an Effective Business Plan in 3 Easy Steps

The idea of starting your own business can be exciting and inspiring, but for most small business owners, writing an effective business plan is not considered an exciting part of starting the process; therefore, many choose not to create one. Traditional business plans can be very dry and uninteresting, so you are about to learn how to create an effective business plan that not only gets you excited, it will inspire you, and others, to take action. The length and details of an effective business plan will be determined by the type of business you're creating. The key is to create not just another business plan, but an effective business plan that inspires you, and others, to take action.

First, let's get clear on the essentials components of an effective business plan:

• Executive Summary

• Market Analysis

• Company Description

• Organization & Management

• Marketing & Sales Management

• Service or Product Line

• Funding Request

• Financials

• Appendix

Part 1: Executive Summary

The executive summary is the most important component of an effective business plan because it will be the first thing the reader sees. This is where you've got to grab the reader's attention and inspire them to support your vision through your mission statement. Provide a history of your company, its current standing, and future vision.

Although the executive summary should be the first component in the business plan layout, it should actually be the last component you create. Once you have completed all other components it will be easier to come back to the executive summary and nicely tie in key points.

Part 2: Market Analysis

This is your opportunity to shine and highlight your knowledge of the industry. This will also be where you will identify your target market and what you know about them. Take this opportunity to spotlight comprehensive market research and projected profit margins.

Part 3: Company Description

Keeping it brief, describe how all the elements of your business fit together. This component should include how the nature of your business makes you unique and the primary factors that will make your company a success. Be sure to clarify the marketplace need and how your company is poised for a competitive edge.

Part 4: Operation and Management

In this component, include your business's organizational structure, details about ownership, and profiles of your management team. This is also where you would include information on the board of directors or advisory board. Outline a plan to keep your staff in place by detailing salaries and benefits. A key factor in this section is to clarify what kind of incentives and bonuses will be provided to keep your staff motivated and employed.

Part 5: Marketing and Sales Management

Use this section to share your vision for getting and growing your customer/client base - as they will be the lifeblood of your business. Clearly define and explain a comprehensive market strategy that will be flexible to changing market needs.

Part 6: Service or Product Line

Here is where you will want to focus on the distinct advantage your product or service has over the competition. Emphasize the benefits to customers/clients and why they will be inclined to choose your product over the competition. Also include ideas and visions for future products and services. Be sure to carry your passionate message throughout this section and back it up with concrete data.

Part 7: Funding Request

A vital component to an effective business plan. Clearly define the amount of funding you are requesting and long-range strategies that could impact your ability to repay the funding. Outline best and worst case scenarios and back up your request with financial statements. Voice your vision and passion and back it up with solid financial sense.

Part 8: Financials

This is where you will include financial documents to justify your statements in previous components.

Part 9: Appendix

This is where all additional documents will be placed for the reader on an as-needed basis.

Now that we've clarified the essential components of an effective business plan, let's discuss how to write an effective business plan that inspires action:

ACTION STEPS:

1. Create a compelling story

2. Voice your passion and inspiration

3. Be confident

Create a Compelling Story

Writing a compelling story will be the factor to inspire action; this is what you will want to focus on in the executive summary. Obviously, the purpose is to inspire venture capitalists or a bank to fund your vision, but you can also use it to inspire your own motivation to drive the success of the business. Be as heartfelt and passionate as you can when sharing your mission statement and the vision of the company, because it will be that sincerity and passion that will create empathy from the reader.

Whatever your vision for the future of the company, take it one step further and think bigger. Your dreams will only go as far as your vision, so step it up. In addition, be creative about ways that the company can grow and expand by creating milestones along the way. The big picture is important, but it's also important to think of ways that you can build momentum by using milestone achievement to drive your passion and motivation further.

Voice Your Passion and Inspiration

Remember, the point is to create an effective business plan that inspires action whether it's just for your own use or to be read by venture capitalists. The best way to achieve this is to openly share your passion and inspiration at every opportunity. The reader will only be as compelled as your words, so make each word count BIG in every component.

Be Confident

How can anyone believe in you if you don't believe in yourself? Do not allow one word of doubt or insecurity to come through in your business plan. You have got to exude confident, knowledge, and strategic thinking throughout your business plan. If you're feeling unsure, put the business plan down until you can get clear on the details.

For more information, you can find a detailed explanation of how to write an effective business plan on the Small Business Administration website.

Related Articles
  How to Motivate Yourself to Plan With Enthusiasm
  An Action Plan Example
  How to Set Goals
  Copy successful people
  Dont Just Read Write
  5-Step Goal Setting Guide
  How to Develop the Writing Habit-Even if You Don’t Have Time to Write
  It Takes Planning
  Any Plans
  12 Steps to Implementing Anything in Your Business : Step Six: Use Plans, Schedules, Budgets and Controls
  Business Ideas: Your Plan and Business Actions
  Five Steps to a Business Plan
  How to Get Top Referrals
  Be Specific
  GIAP: Goal Identication And Achievement Process
  Don't Write A Business Plan ... Until you do these 5 simple things
  I Am Confused
  Create Empire Building
  Easy Business Plan
  Lucky Number 7

Article Tags: accountability, business owner, business plan, effective, results, successful business



Related Forum Posts
Business Innovation - Hi Simon If you can finish off the Business Plan and think about your strategic direction or how you are going to use your product to convince people it's a great idea, it will set the foundation for your programming project. You see, when you are looking for funding you will need a Business Plan and Strategic Plan that will convince companies to invest into your new idea. Has anyone achieved this idea before using another industry besides health and fitness that you know of? You should also design some mockups as a "preview" for your programming project. This will also help reduce your programming costs as everyone will know exactly what you want if you have detailed mockups already completed including any functionality you require. Starting mockups for websites and software applications on paper is the best way if you're not a guru in graphic editing software.
Re: NEW VIDEO - How to improve your business plan - Ask Evan - Thanks Evan, great intro into how the VC's see business plan. I will take a look, but hope that this video as number 1 in a series. It is unfortunate that these types of errors, the most basic of errors as you point out here are common to too many business plans, having reviewed a few hundred myself from both a development and funding perspective. As a mentor and workshop facilitator for Business Plan development for a number of start-up IT and multimedia companies, your presentation help support and show how the VC's see and evaluate a plan Shameful, that too many don't take the time to learn how to properly prepare, present and defend their plans. Over the years, I have enjoyed Business Plan competitions, and help re-work some of the winning proposals
Re: Quote of the Day - "Have the courage to follow your heart an - [quote="GT Bulmer":102twzd2]Hi, Evan: I haven't yet managed to capitalize on the longings of my heart as successfully as Jobs did[/quote:102twzd2] Hi GT - I woke up thinking about this post and I have a challenge for you for May if you're up to it. Here it is: Write the blog post / article you were born to write. Write something that you can pour your heart and all your passion into. Write something where you can change the life of the person reading it. Write something where if you look back in 10 years you'll be really proud of what you created. Can you do that? I'd love to read it (and I bet a lot of others will too!)
New Small Business Topic - Hello everyone, I'm on the lookout for new topics to add to my site. We just launched a Franchising section and are planning Human Resources section. Do you have any thoughts for a new section? Here's a list of what we currently have: Angel Investors Branding Bank Loans Business Coaching Business Plan Franchises (New) Insurance Legal Marketing Public Relations Sales Small Biz Loans Venture Capital
2007 Goals - 1. Web site complete, fully operational 2. Revenue stream from both individual and corporate 3. Business Plan complete 4. Full marketing strategy complete and implemented


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

Time management for DIY PR

Web Design in 30 Minutes - Can this be Right?

Four Secrets to Earning Income as an Author

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.