How to Write a Business Plan Step by Step: You Real GPS to Business Success

You don’t need a business plan to start a business, but it will sure help you. It is like having a GPS, you don’t need one to get from point A to point B, but it typically saves a lot of time and aggravation.

How to start a business plan? The task can seem daunting. How to make a business plan begins by outlining 12 broad steps including:

1–Introduction for business plan
2–Business plan cover
3–Purpose of the business plan, indeed the business!
4–Business plan table of contents
5–Business plan executive summary
6–Description/location of the business
7–Market analysis for business plan
8–Products and services to be sold by business
9–Organization and management
10–Marketing and sales management
11–The all-important financials of the business
12–The appendices of supporting documents.

Do you really need to take the time and make the effort to write a business plan for your new small business or home-based enterprise? The short answer is that you don’t actually need one, but it is advisable that you create one. It is a lot of work, but it gives you a road map to set you on the course to achieve your goal of a profitable business and an independent, well-lived life. Think of your plan as your “GPS to success.”

If You Fail to Plan, Your’re Planning to Fail

There is an old but true saying: If you fail to plan then you are planning to fail. While “going with the flow” might work on vacation or for a long weekend, it has no place in business. Writing a plan will not only serve as your GPS device, but it will be extraordinarily helpful in gaining necessary funding for your new venture, particularly now when lending is so tight for an unknown business. (The word in the lending markets is that when banks lend money at all, it is based on old-style lending criteria where things like your company’s written plans play a big role.)
Find a Free Sample Business Plan
If you are knowledgeable about your business – either the business you are in or the business you will start – but have little or no knowledge on how to put together a simple plan, one of your best first steps would be to go to the internet and search out and print out a free example or a template that is as close to your business as you can find. If you are in or will start a commercial real estate business, for example, looking at a plan for another real estate company would be helpful to see how its senior management handles the various sections of the plan.
Once you look at a plan of a company that closely compares to what you will do, go to the internet again and print out several free sample plans from different businesses.
It is a good idea to pick out very different small businesses from the one you are in so you can see how companies handle the creation of their plans. For example, if you will launch an investment and financial management business, technology and software business or a brokerage and mortgage company, definitely consult good plans in your area of endeavor, but also print out plans for enterprises as dissimilar as a massage therapy business, basket making, lesson and planning and education, and an eBay business plan. These samples and templates will be a real eye opener for you and will help you understand the process better and how different portions of the plan fit together.
You will also find different voices and tones in the various plans that will help you find your voice and help you take the right tone for your company. We strongly urge you not to copy any plan, but it will be helpful to you to read over various plans to get a picture of a whole plan. It is like writing a term paper for the first time: never copy someone else’s term paper, but do read over samples so that you can see how a typical term paper fits together and reads and you can get an idea of how a good or great plan goes together.
Read on to learn more in this section…
Frequently Asked Questions about Business Plans
Here are a series of questions you need to ask yourself about the creation and use of that critical plan.
• How do you create a mission statement?
• How do you write a plan?
• What are the key elements of a business plan?
• How do you create a vision statement? What should the cover page include?
• How do you specify the purpose of the plan? What to include; what to leave out.
• Do I need a table of contents to give structure and order to the plan?
• What should an executive summary of a business plan include?
• What about the location and organization of the business? Should that be included in the plan?
• Why is the market analysis important to include in the business plan?
• How detailed do you need to get on the business’s products and services?
• What about the business’s organization and management?
• What about the company’s marketing and sales management?
• How detailed do you need to get with the financials? What about personal financials?
• How extensive does the appendix need to be?
• What to Include in a Business Plan Cover Page?
• A business plan cover page should the name of the business, address of the business, telephone number, fax number, email address, web site, name of owner and name and address individual or group it was submitted to.
• The cover of the document can be as simple or as complex as you like; there is no hard and fast rule. Our advice is to keep is conservative and sober if it is being submitted to a bank for a loan. As your company grows in size and stature within your industry, you can add design elements to the cover page down the road.
• Here is a typical layout and information for a cover page:
• The XYZ Scuba Diving Co.
• 2720 North Broadway
• Key West, Florida 00000
• Telephone: (000) 555-1212
• Fax: (000) 5551223
• Email:
• URL:
• Prepared by
• John Smith
• President
• Submitted to
• KeyWest National Bank
• Monroe Place
Key West, Florida 00000
Include a Business Plan Purpose Statement on Your Plan
Include a “Business Plan Purpose Statement” when you create a business plan for submission to a bank for a loan. Although it is not absolutely necessary, it can have positive impact on getting the loan. It could be a page or less in the document detailing the impetus behind the development of a plan.
Here is an example Business Plan Purpose Statement:
“The XYZ Scuba Company is proud to present its Business Plan to the First Island Bank. The state of Florida has had a long and exciting history of growth and innovation that continues to this day. It is also a tremendous state for businesses that are able to spot opportunities and exploit them before the competition.
“One of the opportunities that we, the XYZ Scuba Company, has uncovered in recent months is a vast, unmet demand for scuba diving lessons and the rental of first-rate scuba diving equipment for beginners. While the advanced and expert divers bring their own equipment for diving here, new divers and those who want to merely dabble in the sport need to rent equipment when they take scuba lessons.
“Many casual divers might want to spend as little as a day in this activity, while others will commit much of their visit to here to learning how to dive. Although there are many “mom and pop” shops that offer some rental equipment, there are no retail outlets within 50 miles of our location that offers diving lessons and a full array of equipment to handle that one- to two-person group or the 50-person scuba outing.
“The bank loan we are seeking for this new venture will not only allow us to profit from this venture but it will positively impact our area. Through contacts we have in the media and our web site, we will draw many new vacationers and visitors seeking out scuba diving to our area. We will also hire an additional eight people to begin with to implement the new program.”
Create a similar Business Plan Purpose Statement for your business plan and include not only your potential profit opportunity but the impact it will have on your area.
How powerful can these statements be? We were in contact with real estate developer/entrepreneur who brought a huge computer maker to his area to open a call center. Although he had sold the computer maker on coming into the area, it was terribly difficult to get a loan from the large eastern banks to build the call center.
He took his business plan to regional and local banks, who were interested but too small to do such a deal. However, as the business plan and business plan purpose statement revealed, the computer maker would bring so many jobs to the area that the regional banks formed a consortium to get this deal done. Even the governor of the state and the state legislature got involved and put up state money to make sure this call center got built.

Include Table of Contents in Business Plan Format
To create an easy-to-follow business plan format, include a table of contents page to tie in the whole document. In the table of contents, list the key sections and subsections.
Parts of a Business Plan
Here are
There should be a ‘caution’ stamped on table of contents page saying “Handle with Care.” You need to proofread and re-proofread this document, especially if it is going to a bank because they focus on things like words being misspelled and sections that are not where they are supposed to be. The tendency is to set up the table of contents early on, which is fine, however, the table of contents needs to be the last page read and each page number on the contents page needs to be checked. If on the contents page it says that “The Financials” are on page 20 and “The Financials” turn out to be on page 22, your banker will naturally wonder what else might be wrong with the numbers. Further, check that the titles used on the table of contents page match the titles used in the section of the document.
Besides being a well-thought-through document, your business plan must be error free.
Is Your Competition Using a Business Plan? Then You Should Too!
Here are the businesses that are heavily searched for business plan information, which suggests that these particular businesses may be heavier users of business plans than others. Is your industry on this list? If so, make sure you too do a business plan!
Here is the list: bakery, bank, beauty salon, bed breakfast, bowling alley, call center, car wash, catering, child care business, coffee shop, daycare, dental office, farm, fitness center, hair salon, hotel, insurance, internet café, internet, landscaping, law firm, martial arts, mortgage company, night club, online, photography, real estate investment, restaurant, retail outlets, tanning salon, web hosting, winery.
• s, and outlines.

Business Plan Summary: Make It Well Done & Interesting
The Business Plan Summary or Executive Summary is the first page in your business plan to be read (after the cover page), but it needs to be the last page that is written. Each section of the business plan itself needs to be thought through carefully in order for you to get the most valuable document you can for your business.
The Business Plan Summary should be no more than two pages. We think anything over three-quarters of one page is probably too long. The summary should be just that…a summary of your entire plan.
It needs to be written in the most interesting fashion possible. It needs to be written in a way that paints a picture of what you are trying to accomplish. You want your reader to read your Executive Summary and want to learn more about your company. If, for example, you can get your banker to generate a little enthusiasm toward your business based on what he or she is reading, you are one step closer to getting the loan that you want.
One CAUTION: We suggested above that the Executive Summary is the first thing read but the last thing written. The trouble with that scenario is that you will be physically and emotionally tired of this document by the time you complete it and possibly in no mood to do a great job on the summary.
Here’s a tip: As you complete each section of the plan, summarized that section while it is still fresh in your mind. Each section summary should not be more than a five- or six-sentence paragraph. Then, when you complete the last section of the business plan you will also be preparing to complete the last one paragraph summary.
Combine all of these various paragraphs together into one document and begin to either rewrite it or edit it. By taking the time to create the summary as you complete a section, you will not have to constantly go back to the larger document as you are writing the Executive Summary. It speeds the process and will help you create a better summary.
The Summary needs to be well organized taking the reader from one logical section to the next. This is easily done by following the line-up of sections in the document.
In Writing a Business Plan, Tell a Compelling Story in Description
When writing a business plan, you need to tell a compelling story that will draw in your readers (bankers, investors, potential employees), especially in this section that talks about your business and its location.
You need to paint a picture or a series of pictures about who you are, what you do, why you do it. You must give the reader a good idea about who your customers are and why they do business with you. What do you offer them that is different, exciting, new? In fact, what is different, exciting and new about you? Anything? Get it into this section. You must tell the reader how you operate your company. Where will you operate your business and why. The most compelling part of this picture is how you intend to profit and grow your business. That, as they say, is truly the bottom line!
When writing a business plan, begin this section on the Description/Location of the Business with your Mission Statement, which is a statement that tells the reader why your company is here; why it exists. Click here to go to Mission Statement Page.
Next, create your Vision Statement. Your Vision Statement, unlike your Mission Statement, is a big, bold picture of your firm’s future. Click here to go to Vision Statement Page.
If you would like to when writing a business plan (and it is not absolutely necessary), follow the Mission and Vision Statement with a Values Statement. A Values Statement talks about your core beliefs and core values. This statement needs to be constructed in a way that does not offend or put off anyone who might hold different beliefs than you. For example, you might wish to talk about how your business leaves the planet a greener place to live due to certain actions that you take or perhaps how you donate $.05 out of every dollar of profit to a children’s fund or another worthy charity.
Writing a Business Plan
Include your goals and objectives in this section of your business plan but keep those goals real, positive and growth oriented. For example, if you will start a coffee bar, for your goals and objectives, don’t declare that you will outpace Startbucks in number of outlets and volume in 10 years. That just looks silly to a hard-eyed banker or potential investor. Come up with doable, real goals that you can reach in the next five to 10 years by s-t-r-e-t-c-h-i-n-g.
When you paint the picture about your goals and objectives, draw an accurate picture with your own “GPS” so that those reading this plan fully understand how you intend to get from Point A to Point B. Let’s say, for example, that you are quite handy remodeling houses and spotting real estate bargains. You develop a business plan to purchase aging but elegant mansions in interesting markets to fix them up to modern code standards and then market them as bed and breakfast facilities. Your concept is the start with one mansion, get it up and running, sell off half the investment to investors and use the newly raised money to buy the next aging mansion and so on. You will continue to replicate this business strategy. In this case, lenders and investors can get a good handle on what you are doing and how you are doing it. It is best that lenders and investors need to understand your business concept at this level. What would be very exciting in the case of this remodeler would be if he or she already had one property up and running and successful. That would get people’s attention (and money).
Detail in this section where you will run your business with as much information as possible about your offices or building.
Create a brief history of the company, if it has been in business for awhile. Don’t bore everyone with what you have been doing since college and how this business came to be, except if it is relevant.
List everyone involved in the company. Give some details of their history and include a resume in the Appendix Section of the business plan document. In the case of the above-mentioned remodeler, lenders and investors would be extremely interested to learn that he or she has had experience operating successful bed and breakfasts in the past.
REMINDER: This section has to engage the reader and the reader MUST come away with a strong idea of how the business operates, why it will make a profit and why it will grow. As you write this section, aim for this response from your reader: “This is a great idea, how can I get in on the ground floor as an investor or lender?” If you get that response, you have told a compelling story indeed!
Business Marketing Plan Needs to be Part of Overall Plan
The Marketing Analysis or Business Marketing Plan section is an integral part of your business plan document. The readers of your business plan document(bankers, would-be investors, potential employees) need to understand how you will make a profit and grow your small business into a larger business. Along with that they want to understand how well you know your market.
Whether you sell out of a traditional retail store, work out of an office or have an online business on the internet, you need to have a thorough understanding of your customers or clients. You may need to hire a marketing research firm to undertake primary and secondary market research for you, or you can do it yourself. In either case, you must detail for your business plan readers your business marketing plan. If you hire a market research firm, its report will make a great addition to your business plan Appendix.
Detail in Business Plan Services and Products of Firm
Parts of a Business Plan
Here are the typical sections of a business plan that you should consider when writing a business plan:
1. Business Plan Cover
2. Purpose of the Plan
3. Table of Contents
4. Executive Summary
5. Description/Location of the Business
6. Market Analysis
7. Products and Services
8. Organization and Management
9. Marketing and Sales Management
10. The Financials of the Business
11. Appendices of Supporting Documents

You need to describe in the business plan services and products of your company. While this might seem like the easiest section with which to deal, it is not; it is one of the trickiest. Once again, it is one of those sections that need to be handled with extreme care.
While it is relatively easy to describe your services and products, you also need to talk about product and/or pricing. Not just the pricing but why you have set the pricing as you have. Was it based on a strategic marketing plan? was the priced picked out of the air because you thought you could make a couple of bucks at this price?
Your business plan readers, particularly the bankers and would-be investors in the crowd, need to understand your business and pricing for your services and products are a big part of that. Keep this section focused and describe how you use your pricing to remain competitive.
If you have brochures, advertising, press releases and pictures, some can be reproduced in this section, all should be added to the Appendix of the business plan.
When You Write a Business Plan Focus on Operations & Management Section
Parts of a Business Plan
Here are the typical sections of a business plan that you should consider when writing a business plan:
1. Business Plan Cover
2. Purpose of the Plan
3. Table of Contents
4. Executive Summary
5. Description/Location of the Business
6. Market Analysis
7. Products and Services
8. Organization and Management
9. Marketing and Sales Management
10. The Financials of the Business
11. Appendices of Supporting Documents

When you write a business plan, even the smallest company has many “moving parts” that need to mesh together. While your readers—the bankers and potential investors in your business—will all want to know how your firm will make a profit (their main focus is evaluating business plans for funding), they also will want to know how all of the parts of your company will function as a whole. Your Operations and Management Section of the business plan is crucial in explaining how it all fits together and works together–just like a fine Swiss watch!

When you write a business plan, even the smallest company has many “moving parts” that need to mesh together. While your readers—the bankers and potential investors in your business—will all want to know how your firm will make a profit (their main focus is evaluating business plans for funding), they also will want to know how all of the parts of your company will function as a whole. Your Operations and Management Section of the business plan is crucial in explaining how it all fits together and works together–just like a fine Swiss watch!
Your Company’s Operations
As you write a business plan, depending on the type of business you are in (or going into), you can break out your operations into the following subject areas as suggests:
• Production
• Location
• Legal Environment
• Personnel
• Inventory
• Suppliers and
• Credit Policies
Naturally, these areas need to be customized depending on your business such as aa mortgage company business plan, bowling alley business plan, law firm business plan, winery business plan, call center business plan, landscaping business plan, sample restaurant business plan, martial arts business plan or a dental business plan. Depending on your business, search out free sample business plans that relate to your business. Never copy a business plan but if they are available on the internet, download them and study them. Let’s say you are forming a record company and want to create a record company business plan. Search for these business plans on the internet. If business plans for your business are not immediately available for download, then check for business plan freeware or a free internet business plan template. There are a lot of resources to help you create the perfect business plan!
Include Business Market Plan in Your Business Plan Document
An effective bplan requires a business market plan to be incorporated within the document. The section of your business plan focused on Marketing and Sales Management needs to detail the conclusions of your market research efforts.
Typically, there are two types of market research–primary marketing research and secondary marketing research so that the readers of your plan (and you!) thoroughly understand how you arrived at the conclusions you did in answering the question: Who is my customer? A word of caution: you may be smart, your products and/or services maybe superb but unless you have an effective marketing plan, your business could flounder. Why? Because a good business market plan begins with careful market research. If you “assume” you know who your customer is and act on that, there is a chance that you will get it wrong.
Business Financial Plan Is a Key Part of the Overall Business Plan
The business financial plan is an important part of your overall business plan, even if you are a new business that has not yet made its first dollar. If you are submitting your business plan to lenders in order to secure loans for the business—start up business or ongoing business—make sure you submit three financial statements in this section. They include a balance statement or balance sheet, income statement and cash flow statement.

For the new firm, your business financial plan should include these statements projecting out for a period of one year. The bankers will have a lot of questions on how you came up with these numbers so be prepared to discuss your marketing research and marketing plan in depth when you meet with them.
For the firm that has been in business for some time, the banks will want to see three years worth of these statements. For many businesses that we have visited with lately, this is a real problem due to the recent recession. Virtually everyone has at least one of the past three years with less than profitable numbers. Entrepreneurs say that a good away to work around this is to develop a great narrative about the situation in which you found yourself at the beginning of 2009 and how your worked your way out of it. Do the bankers need more convincing? You are here! You have survived!
For both the new and existing company, lenders will want to know about sources of funding, capital equipment and forecast of income and cash flow. Typically, lenders will want to see a business tax return and the personal tax return of the owner of the existing business and the personal tax return of the entrepreneur who is starting a new business (no tax returns have yet been filed for the business).
For the existing company and for the new company, the business financial plan statements are an interrelation of six key elements of the business that the typical entrepreneur spends an ungodly amount of his or her time focused on — revenue, expense, profit (loss), assets, liabilities and the all important net worth.
Business Financial Statements Defined
Let’s define each of the above-mentioned statements to determine what is involved in putting them together.
What is a balance statement? The balance statement represents the basic accounting equation … Assets – Liabilities = Net Worth. This number measures the value of a business at a given point in time. There are templates available to create a balance statement for your business.
What is an income statement? The business’s income statement details how it has performed over a period of time—perhaps the last six months or one year. It is also called a profit and loss statement or income and expense statement. It measures business performance over specific period of time. The equation is: Revenue – Expenses = Profit (Loss).
What is a cash flow statement? The cash flow statement is used to monitor incoming and outgoing cash on a monthly basis. If your cash flow statement is negative, there is more money going out than coming in…an unsustainable condition for your business.
In Business Plan Appendix, Show Docs from Other Sections
The business plan appendix section of your business plan should be a breeze to complete because you should have been assembling all of the documents that will go into this section as you went along producing other sections of the plan.
Depending on your audience for the business plan, you should include the following documentation in your business plan appendix:
tax retu

    • rns


    • copy of lease or proposed purchase agreement


    • copy of licenses and other legal documents required by your business


    • copy of resumes of all principals of the company


    • copies of letters of intend of suppliers


    • company brochures and other marketing materials


    marketing research material

If your audience for the business plan will be a mixed one such as your banker and other lenders, potential investors, prospective employees, casual readers (such as your brother-in-law) and others, feel free not to include sensitive financial data. Instead, include a blank page in the business plan appendix that says financial documentation supplied upon request. Another route to take is to include all of the above documentation in the business plan and distribute it only to lenders and potential investors. For others interested in your company, you can create an “about Us” document from other sections of the business plan. Another route is to simply create two versions of the business plan–one with a business plan appendis and one without a business plan appendix.
We have listed some documents above but you are free to add a variety of other materials to this section to fill out the picture of the company you have created or the one you wish to create. More is better when it comes to business plan appendices because it gives the reader more to go on when they need to make decisions about you and your company.

© Editorial Resources; 2018. All rights reserved.

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