How to Write a Business Plan

If you’re thinking about starting a business and have some time off for the holiday season, now’s the time to start putting your ideas on paper. December is National Write a Business Plan Month, and entrepreneurs who sort out their plans this month can start the new year feeling organized and confident that they’re ready to launch their new business.

Why You Need a Business Plan

Entrepreneurs tend to be optimistic, big-idea people, but sometimes they need help nailing down the details that will help them achieve their vision. That’s the point of a business plan.

One good method for getting started on a business plan is to take a look at your strengths, weaknesses, opportunities, and threats, known as a SWOT analysis. For example, a restaurateur may be a marvelous chef (strength), but have no knowledge of how to market a business (weakness). Identifying weaknesses in advance can help entrepreneurs plan for budgetary concerns, staffing needs, and personal skills development.

Fundamental Questions

A business plan must be able to answer some key questions – especially any questions investors, partners, or banks may ask.

The most important question is: Why is there a need for this business? Surprisingly, this is a question that sometimes is overlooked. Entrepreneurs may decide to start a business doing something they love, or in order to be their own boss, without considering whether people will actually want the product or service they’re offering.

After identifying the need for your business, you can refer to your SWOT analysis to look at competitors (threats). In your business plan, you should be able to describe how your business would differ from your competition.

Another question you should be able to answer is: Who are your customers, and how will you reach them? Using a restaurateur again as an example, the customers would be people who want to eat. But that’s not specific enough for a business plan. A marketing plan is more effective when it includes details, such as target customer demographic and income data.

Knowing how to reach customers depends a great deal on what you know about their behavior – where they shop, where they get their news, and other information that can help you develop effective advertising and marketing. To get this kind of business intelligence, you may need to hire an external marketing firm, but it’s money that’s well spent if the result is a steady stream of customers.

Tailoring the Plan

You may need to write a few versions of your business plan, depending on who will read it. For example, if you’re seeking a loan or investors, be prepared to answer questions about how much capital you need to get started, how you plan to make a profit, and at what point you expect to break even. Business plans presented to banks or investors should include as much detail as possible about finances.

If you’re looking for a business partner, think of the questions they would ask. They’d definitely want to know how decision-making will occur, who is accountable for specific business tasks, and how they would be compensated.

No matter who your audience may be, your business plan should show that you’ve thought about your long-term plans. Define where you want to be in five years, and outline specific, measurable milestones that will help you reach your goals.

Lusk Law, LLC specializes in helping small businesses with planning, and our experienced attorneys have provided legal counsel and representation to entrepreneurs in Frederick County, Howard County, Baltimore County, Baltimore City, Carroll County, Washington County, and Anne Arundel County, and other counties in Maryland. Please call us at 443-535-9715 or fill out our contact form if you have any questions about this topic.

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