From my experience starting a business requires a few things, including:

1. A good idea with a real market opportunity / “need”.
2. The right people & skills to make it happen.
3. CA$H to fund the business creation until it can maintain itself.

Most budding entrepreneurs will often have the first one, possibly even the second one but rarely the third. Most entrepreneurs will need to find the money to support the creation of their business idea, but often getting other people excited about your idea, as excited as YOU are, is an almost impossible task (especially those with the money!). That is why we need Business Plans.

A Business Plan is a document that outlines a businesses ‘plan’ for a set period of time (the “planning period”) – normally 3 or 5 years. The idea of writing a Business Plan may make your stomach turn, but it shouldn’t. Business Plans can be a simple, powerful and effective way of communicating your business ideas to potential investors whilst also forcing you to organise your thoughts into a useable plan, helping you achieve your goals in a reasonable time frame.  I’m sure you’ve heard the saying, “If you fail to plan, you plan to fail”. With the right tools (aka templates) and knowledge, writing a killer Business Plan is easy.

STEP 1: Download the Business Plan template

The presentation of your business plan is almost as important as the content you put into it, so if  you are not a desktop publishing expert I suggest you save yourself some time and use a template. You can download the one I have created below, or find another that you like – I’m sure there are others on the web.

I’ve used the built in styles in Word to keep the template simple, but feel free to change anything and everything to your taste. You should, of course, update the look and feel of the document to suit your business (e.g. use your company colours, logos, brands etc).

Using this template:

STEP 2: Fill out what you can - delete what you don't need

Once you have your template, it's as easy as going through the document and answering the questions / entering your information into the space provided. This can seem intimidating at first, especially if you don't know all the answers yet, so the best thing to do is to make a start - run through the document and jot down notes in any sections you can, with whatever comes to mind. Leave any sections that you don't understand or don't have the information for and delete any headings that don't apply to your business.

Don't waste too much time on this part - just scribble down your thoughts for now and save this version as a draft. We will come back later and refine your ideas.

Step 3: Do your Market Research

As annoying as it may be, you will have to do real research and have real statistics to determine things like:

• The size of your target market (your customers)
• The value of your target market (how much do these people spend on products / services like yours)
• That there is an actual need for your product / service
• Why people will buy your product / service and how much they're willing to pay for it.

Even though you "just know" there is a market and that there's money to be made with your product / service, if you have some statistics and research to back you up you will be a lot more convincing to others when you are asking for their money and support.

Market research can be as simple as searching online for statistics from your industry, or for more specific results you can set up phone / email / web surveys of your current, past and prospective customers to find out things like "would they pay for your service" and "if so how much".

Your market research will form the basis of your whole business plan so you should spend a significant amount of time on this step - lets face it: this is confirming and proving that you have a decent business idea so get realistic about what information you need and get creative about how you can find that information, but be careful not to be biased to only see the information you want to see. If your research shows that your market is already dominated by another competitor or your customers are unlikely to pay your prices, you need to review your business ideas.

Step 4: Do your budget

If you are serious about pitching your business to a potential investor (even if it is a friend or family member) you will need to have a good idea about how much money you will need to start the business - you need a budget. If you've never done a budget before that's ok, it's really not as hard as it sounds. Start by writing down your EXPENSES (what you need to pay for, when, and how much) and your INCOME (where and when will you get money). Do this month-by-month for the entire planning period (e.g. 3 or 5 years). By the end of it you should be able to see how much money you will be making (or losing) for the next few years and when (or if) your business will be cash positive (e.g. be making more money than it's spending). This should then tell you how much money you'll need to come up with in order to get the business to that point and when you are likely to be able to start paying it back or giving your investors some return on their investment.

Step 5: Finish your Business Plan draft

With all the information from your market research and your budget you should now be able to fill in the rest of the sections of your draft Business Plan. Go through and finish this draft, so there are no blank spaces. If you need more information, go back and do more research, but don't go past this step until you've finished your draft.

Step 6: Refine your Business Plan & turn words into pictures!

Once all your information is in your plan, you can then begin refining your plan. Do this by going through one section at a time and trying to condense what you've written into smaller, more concise sentences. Try to only include the most relevant information and remember to put yourself into the readers (investors) shoes - only include things that are of interest and relevance to them, not just because you want to talk about it. For example, investors are far more concerned about how realistic your financial sales projections are then what fancy features your website will have.

Your aim in this step is to condense each section to only a few sentences. Yes, that means 1 - 3 sentences max, or even better replace what text you can with a picture, diagram, table or graph. This is a very important step and I believe this is what sets apart ordinary business plans from killer business plans - KEEP IT SIMPLE! The fewer words and pages in your plan and the more interesting images, diagrams, graphs and tables, the more likely the investor will get to the end without falling asleep!

Overall you should be aiming to have a complete Business Plan that is no longer than about 25 - 30 pages (not including appendices).

Step 7: Find proof readers

This step is easy - find as many people as you can (that you trust) to read through your draft Business Plan and give you their constructive criticism. If you feel it is necessary, get the proof reader to sign a copy of the "Confidentiality Agreement" at the beginning of the document before reading it to ensure they won't copy, steal or distribute your Business Plan to anyone else. Try to be open when receiving feedback from your proof readers, especially if they are successful entrepreneurs themselves - it is very easy to be over confident in your own business and be blind to major risks or over estimate sales etc. Take all comments on board and review your Business Plan again, modifying what you think needs to be modified.

You may want to do this step several times over or not at all - it's up to you. In my experience, proof readers will always find major and minor things that I overlooked and my plans are always much better off after a round or two of proof-reading.

Step 8: Polish & Present

By the time you've finished your proof-reading you should be left with a simple, concise, powerful and complete business plan. Now all you need is to dress it up ready for presenting.

I am a big believer in the saying "Perception is Reality" in the sense that if you appear professional then you ARE professional. This is why I believe it is worthwhile spending a little time and money getting your Business Plan printed and presented properly.

Cover Page

This should be a nice simple design based entirely on your business brand / logo. In fact, the entire business plan should be themed to suit your business brand / logo.

When printing your Business Plan your cover should be printed full colour on cardboard, not on paper like the rest of the document. If you are lucky enough to know any graphic designers, it is also a good idea to try to get a professional cover design done - you would be surprised at how much a stunning, professional, catchy cover makes a difference to an investor (especially if they read several a day/week/month).

Inner Pages

These should be printed in full colour on decent, high quality paper (go for the highest quality you can afford). This means printing them on your home laser printer is probably not the best idea - pay a little extra and get them professionally printed.

Tabs / Dividers

Another nice effect is to have dividers made up to separate each section of the Business Plan. The tabs / dividers should stick out the side with the name of the section on it (e.g. Executive Summary, Market Research, etc) and on the front of the divider make a mini-title page with the name of the section, again themed in your business' colours / brand. This makes it easy for the reader to flick directly to the section of interest and breaks up the plan from being one big chunk of pages.

Binding

Finally, bind the whole thing together into a professional, presentable document. You might find that doing 5 - 10 copies all at once is cheaper than doing 1 or 2 now and having to do more later so think about how many you might need in the long run (remembering that investors will most likely want to keep a copy for future reference).

Step 9: Use your Business Plan

Now you are ready to use your business plan for whatever you like - present it to your bank manager and convince him to give you a business loan, pitch it to your mum & dad and convince them to invest their funds or approach your local group of Angel Investors and see what they think. Whatever you use it for, don't forget to also follow it. You now have a plan for your business for the next 3 or 5 years make sure you use it to help you reach your goals.

You may find as you go along that your projections were under or over what you are actually achieving, more research is released or new business opportunities arise, which is why it is a good idea to keep updating your electronic copy so you have an accurate plan at all times.

Other Hints & Tips

• Whenever you make changes to your business plan, try saving it under a different version number just in case you need to revert back to an old version (e.g. Business Plan v1.1, 1.2, 1.3, 2.0, 2.1 etc).
• If you ever need to send an electronic copy to someone (e.g. via email or on a CD) it would be best to convert it to a PDF file so they are not able to directly edit it. There are plenty of free PDF converters available by searching on Google.
• If you have any trouble using the template feel free to email me or leave a comment and I'll help where possible.

I will endeavour to upload a SAMPLE completed Business Plan in the near future to give you a better idea of what a finished Business Plan should look like. I hope this post has been somewhat helpful to you and I wish you all the success in your business ventures!

Stay amazing!!

-- Katrina

Tags Downloads, Market Research, Planning, Raising Capital, Templates