Home
>
Strategic Planning
>
How to Write a Business Plan in Five Steps

How to Write a Business Plan in Five Steps

People often ask "What makes a good business plan? Or, "How do I make my plan attractive to lenders and investors?".

The simple answer is that lenders and investors (I'll call them "readers" from here on out) are looking for "good deals". A "good deal" is one that offers the reader a reasonable rate of return for the risk assumed. The complete answer is that you should write a plan that a reader will want to read and then get it to reader(s) who are looking for your type of project and levels of risk and return. This article deals with the first part of the equation - how to write a business plan that readers will want to read.

Readers want plans that clearly, accurately and completely allow them to make an initial determination about the project. Here are the steps needed to write that plan:

To paraphrase a real estate expression, the three most important things about a business plan are research, research and research. While other things are important (even critical), ultimately your plan will live or die on the quality and completeness of your information. For that matter, you're about to risk your time and financial future on a project - how much information do you want to have? Step one:

1. Become expert in your project. Learn everything possible about:

The customers to whom you will sell (your market).

The competition.

The actual costs of operating your business (get quotes).

The actual results of similar projects.

Your industry.

The project's physical location(s) and it's impact (if any) on the project.

The people who will be key to the project.

(You are welcome to use as a guide the questions that we use with FundablePlans to query a business plan. It is available via e-mail at http://www.fundableplans.com/how-to-do-a-business-plan.html )

If you've followed the above, you've now got a mound of research - sticky notes, web pages, reports, quotes, etc., etc. But, what does it all mean? Step two:

2. Analyze. (Hopefully) when you first got the idea for your project there was a sense of excitement and a feeling that "this is a sure winner". Now is the time to see if your feelings were well founded. With a critical eye, do a "SWOT" (strengths, weaknesses, opportunities, threats) analysis on your project. Determine what you are able to do to capitalize on the S and O and minimize the W and T.

Steps one and two may have changed somewhat your "sure winner" feelings - which is good. (If not, you either have hit upon the next "sliced bread" or you need to redo the preceding steps). Presuming that your research and analysis shows a worthwhile use of your time and money (and that of your readers) move to step three:

3. Forecast. This is where the "rubber meets the road". Using your research and analysis you will now tell your readers that "this is what will happen to the money". You'll do it with accounting forecasts called "pro forma" statements. Provide either three or five years of statements with (generally) the first year done monthly, the second and third done quarterly and (if included) the last two years done annually. In all events, include:

Operating statements.

Cash flow forecasts.

Balance sheets.

Optionally include:

Various ratios (loan to value, debt service coverage, etc.)

In addition to the above, you should usually include a "Source and Use of Funds" showing the sources of the initial capital and on what it will be spent.

By this point you're either sure you have a winner (differing from "a sure winner" in that you recognize the obstacles but are prepared to work through them) or you are going back to the drawing board to rethink your project. If you "have a winner", step four is:

4. Write the plan. Obviously, you need to be able to use good grammar and spelling. You should be clear, concise and complete. Fill your plan with compelling facts gleaned from your research. Do not avoid the W and T from your SWOT analysis, rather, describe in detail how you will deal with them. Avoid platitudes and your own opinions - everyone knows that you like the idea, readers need facts to determine if they like it. Try to keep your answers as short as possible while still giving complete information. With the exception of the Executive Summary, keep your answers somewhat dry and factual - "short, sweet and to the point".

The Executive Summary, on the other hand, is where you "sell the sizzle". It is here that you make the claim that yours is a dynamic project that deserves full consideration. You need to compel your reader to read your plan and tell them why you are excited about the project.

There are likely as many ways to compile a business plan as there are authors of them. A sample outline is at http://www.fundableplans.com/how-to-do-a-business-plan.html . (It requires Adobe Reader to view and includes our logo which is not included in our plans.) You will want to attach to your plan copies of documents referenced in it and historical data on the business (if it is not a startup).

You've now done the lions share of the work leaving only step five:

5. Review and revise. The review should be first by the author(s) and then by trusted advisors - the more people that you can get to review your plan the more likely you are to find any problems before they are found by a reader.

Follow the preceding steps and you will have a business plan that will get read and, hopefully, funded. If you have questions about business plans, please feel free to contact me using the below e-mail link.

About The Author

Dave Miller is a business consultant and the creator of http://www.fundableplans.com/how-to-do-a-business-plan.html, an online business plan builder. http://www.fundableplans.com/how-to-do-a-business-plan.html

housekeepers near Buffalo Grove ..

In The News:

Analysts at Silent Push have uncovered a widespread scam that uses counterfeit retail websites to steal the credit card information of online shoppers.

Chrome users need to update their browsers immediately as Google addresses a critical vulnerability that hackers are actively exploiting. Additional security measures are recommended.

A study found teens glance at phones for dangerous two-second intervals while driving, using devices primarily for entertainment, texting and navigation despite crash risks.

Security researchers uncovered a flaw in Windows 11 that allows attackers to disable Secure Boot using Microsoft-signed tools, requiring manual updates to protect against bootkits.

Carnegie Mellon's noninvasive brain technology allows users to move robotic fingers by thinking about the motion, offering new possibilities for people with motor impairments.

Multi-factor authentication (MFA) adds an extra layer of protection to your accounts. Instead of relying only on a password, MFA requires you to verify your identity using two or more methods.

Scientists from Duke, Harvard, and the University of Otago have unveiled a game-changing tool called DunedinPACNI. It uses a single AI brain scan to reveal how fast a person is biologically aging.

A disturbing wave of fake agent phone scams is sweeping across the United States, catching people off guard and draining their savings.

Emojis aren't just playful add-ons; they're powerful tools for building stronger connections in our increasingly digital world.

Google has taken a major step toward the future of clean energy by partnering with Commonwealth Fusion Systems (CFS), an MIT spin-out working to build one of the world’s first commercial fusion reactors.

If you create and share art online, you might have seen messages warning that Facebook's parent company, Meta, claims the right to use or even sell anything you post, whether it's pictures, poems, or artwork.

Cybercriminals hit Qantas in a major data breach that exposed information from up to six million customers.

Having reliable, loud, and timely emergency alerts on your phone or device is important because when severe weather strikes, every second counts.

Here's how your daily brew is becoming the foundation for greener buildings.

Artificial intelligence (AI) and large language models (LLMs), such as ChatGPT, are transforming how we learn. But what does this mean for AI and learning retention?

Modern AI data centers use much more electricity than traditional cloud servers. In many cases, the existing power grid cannot keep up. One innovative solution is gaining traction: repurposed EV batteries for AI data centers.

Microsoft 365 and Outlook users are being targeted by a tactic that injects fake billing alerts directly into their calendars.

Researchers are now showing us that old smartphones as data centers could be the next big thing in sustainable tech.

Scientists have created micro-robots for sinus infection treatment that can enter the nasal cavity, eliminate bacteria directly at the source, and exit without harming surrounding tissue.

Let's examine how your data is collected in everyday life, who is buying and selling it, what happens to it afterward, and, most importantly, what you can do to protect yourself.

Researchers at the University of Sheffield in the U.K. developed small robots called "Pipebots" that can travel inside water pipes to find and potentially repair leaks, all without any excavation.

A groundbreaking new study has uncovered disturbing AI blackmail behavior that many people are unaware of yet.

Four teams of autonomous humanoid robots competed in China's first AI soccer tournament, demonstrating advanced capabilities in ball detection and independent decision-making.

The ID. Buzz autonomous van features self-driving technology with 13 cameras, nine LiDAR units and five radars after Volkswagen partnered with Hamburg and Uber for 2026 deployments.

Social Security phishing scams use urgency and impersonation to steal personal data. Learn how to spot fake SSA emails and implement 10 protective measures.

How to Write a Business Plan in Five Steps

Strategic Planning