Do you want to learn how to write a business plan for small business? Are you in the process of starting a business or raising capital but don’t know how to write a business plan that can attract investors? Then this article is for you.
I was motivated to write this article because I realized that telling you how to develop a small business plan is just not the same as showing you exactly what needs to be included in one. I hope you know that building a business without a business plan is like flying a plane without your radar.
“A business idea is just another idea. But an idea backed by a strong feasibility, a thorough business plan and a smart team is no longer an idea. It’s now a solid business opportunity worth pursuing.” – Ajaero Tony Martins
In this article, I will be providing you with a quick nine step small business plan outline that can serve as a guide to writing a simple business plan that attracts investors. If you are ready to learn, let’s get started.
How to Write a Business Plan for Small Business that Attract Investors
1. The executive summary
The executive summary is what introduces your business to the reader and probably is the most important section for lending institutions. If you can’t convince an investor in the first two or three pages that you have got a good business proposal for them to listen; then just forget about trying to raise capital because your business plan is never going to produce any tangible result. The executive summary is also important as a communication tool to employees as well as any potential customers who need to understand your goals and ideas.
2. A small section on company start up
This section of your business plan is where you have to clearly explain the thought behind the company’s creation and how you or your business associate came up with the idea to start your business. In this section of your business plan, you are expected to explain in detail the business idea, research result, location analysis, organizational structure, corporate structure and so on. You are also expected to explain the business type, industry and Business phase.
3. Your company goal
You will have to use this section to explain in a few paragraphs, what your short and long-term goals for the company are. How fast do you think it will grow? Who will be your primary customers? Also to be included in this section is your company’s vision and business Mission statement. This is very vital and must not be ignored.
4. Biographies of management
This section will be used introduce your business team and what their purposes are to the business. This section should include information such as the names and backgrounds of lead members of the management team and their responsibilities. Also to be included are their area of expertise, prior achievements, their strengths and weaknesses.
How to Write a Business Plan for Small Business that Attract Investors
5. The product/service you will offer
This is where you will include a key piece of information about the product or service your company is offering and how it differs from the competitor’s product in the market.
6. Your market potential
This is the section of a business plan where you need to convince the investors that you are actually targeting either a large market or a growing niche market. You will need to do some research for this section. For instance; If you are planning to open a locally based business, you need to check out the demand for your offering within a certain radius, this should be based on what you determine is a reasonable distance from your business. If you are planning to open an online or Web based business that relies on both the Internet and local traffic for revenues, you’ll need to evaluate demand on a local or a national basis. You can also seek to obtain this type of information online as many different sites will perform this analysis for you.
7. Your marketing plan
This is the section where you will have to ask yourself how you plan to tell the world you have something they need. For example, questions like; will I advertise in print, television, on the Web or all of these? Will I use online marketing tools like search optimization, to get your company listed on search engines and advertised on other Web sites? You will also need to include how much you plan to spend on marketing. It is important to note that your marketing plan should contain marketing strategies and tactics to outwit your competitors.
8. A 3 – 5 year financial projection
This section of a business plan should have a summary of your expected financial forecasts, including spreadsheets showing the method that you used to reach these projections. You will also have to show your balance sheets, income statements and cash-flow projections for the entire period of that year. This section is also where you tell your investors how much money you intend raising as start up capital. The assumptions that you make in this section will make or break your company’s success. If you are unsure about using this kind of financial modeling, get a professional accountant.
9. An exit strategy
All good business plans include a section that lays out the benchmarks you will use in deciding when to call it quit. The strategy could be based on a specific figure, revenue growth, the market’s reception to your idea, or a consensus among top officers.
