You’ve got your business idea, but you need some funding. It’s time to sit down and write the business plan the bank says they need. It seems simple enough – after all, there are lots of templates and examples online – but a couple of days into the process, you’re already stuck. You’re probably asking yourself questions like:
- Am I doing enough research?
- How do I write an Executive Summary?
- What on earth is a cash flow statement?
The problem is that many people approach business plan writing like it’s a glorified form-filling exercise. And that’s no surprise when you consider how many fill-in-the-blank templates can be found online. These templates attempt to simplify a really complex and educational process that requires a lot of critical thinking to do really well. And should you want to use your business plan for anything more than simply applying for a loan, that process becomes even more important.
What Not to Do When Writing Your Business Plan
First of all, make sure your business concept is really clear in your mind. If you can’t easily describe what problem your company solves and who it solves it for, you’re not ready to write your plan.
You don’t want to rush the process of writing a business plan, but you don’t want it to take forever either. Slapping together a business plan in just a few days won’t help you learn about your business environment, and it will probably leave a lot of gaps for the bank to fill in, which they don’t want to do. At the same time, an unfinished business plan can set your launch back by many weeks or months, so don’t procrastinate – just get it done.
Finally, if you know you need to borrow money, but you have none of your own cash to invest into the business, don’t write your business plan yet. The smartest thing you can do is save some money so you can show a lender that you’re willing to invest yourself too.
How to Write an Outstanding Business Plan
- Schedule your time. Thirty minutes to an hour each day of uninterrupted focus so you can be thorough, absorb what you’re learning and researching, and explain it coherently.
- Consider your ideal customer. Everything you do in your business is to serve your best customers better. But how can you do that if you don’t know who they are? Take the time to discover the ideal client for you, and create your marketing and operational plans around that avatar.
- Cite your sources. Market research that isn’t backed up with credible sources is just fluff. Make sure you can explain where you got your information from, with exact URLs and proper references whenever possible.
- Explain the numbers. Financial forecasts without an explanation of how you got the numbers won’t carry much weight. Write out your assumptions – the bank needs to know this, and it’ll help you wrap your head around your profit potential, too.
There’s nothing wrong with using a template to help you structure your plan, but it’s important to think deeply about each aspect of your business, and thoughtfully consider whether your plan makes logical sense. For example, if Facebook ads are among your marketing plans, make sure you set a budget for those ads in your financials. All the pieces of your plan fit together and affect each other. Keep that in mind while you’re writing, and you’ll have a clear plan to submit to the bank.
Want to know more? Take advantage of Small Business BC’s wide selection of seminars for entrepreneurs and small to medium-sized business owners. Space is limited, so don’t miss your chance to register today.