How to write a business plan

A lot of articles have been written on how to write a business plan. You can find thousands of articles online on the subject of writing a winning business plan, but we find that most of them do not truly cover the actual process involved. So here is our contribution on how to write a business plan. The easiest and fastest, yet most professional way.

By Peter Nunes d’Agrella, CEO of PlanMagic Corporation

The Written Business Plan

To write a business plan from scratch is unnecessary and a true waste of time when there are templates available that will help with the written part of the business plan. A program such as PlanMagic Business or other business specific PlanMagic program includes pre-written templates, many for specific businesses, where you have all the required parts in place. The PlanMagic business specific templates even include a detailed product mix providing ideas on what you could/should be offering to your customers and what this involves. Market data is incorporated where possible and many relevant details are already completed and inserted where appropriate for the business type.

Subjects to include are

Introduction
The introduction should include the business description, business formation details, overview of directors and the management team, the business goals and/or mission, the business philosophies and/or identity, the geographical markets, and the vision of the future.

Executive summary
The executive summary needs to reflect the most important parts of the business plan, and typically includes the main objectives, sales summary, details on strategic positioning and strategic alliances, required licenses, the key advantages, and the funds required.

Marketing
The marketing plan is the next part of your business plan. You need to include items such as the product mix, sales estimates, an analysis of the current product mix, a concise competitive research, complete market analysis, the marketing goals & strategies, pricing policy, the advertising & promotion plan, sales management and distribution details, and a SWOT analysis.

Historic analysis
For existing businesses an historic analysis needs to be included in the business plan. This can consist of a general view, the market position, and the historic income statement and balance sheet.

The organizational structure
Next you need to provide details of the structure of the organization. Details of management and personnel, the administrative organization, as well as contingency planning should be detailed.

Operations
The operations plan needs to show the identity, location, premises, layout, and for manufacturers detailed production planning.

Financial plan
The financial plan (which can be taken from the financial projections) need to include the investment budget, the projected return on investment, the viability of the business plan, statistical data (ratios), and a complete overview of projections for at least 3 to 5 years.

Risk management
Depending on business type and size, subjects such as risk reduction and exit strategy may have to be added.

Appendices
Several appendices can be inserted at the end of the plan to enhance the overall picture. You can think of company brochures, product brochures, patent or trademark information, and so forth. For sole proprietors/traders a personal income statement has to be included showing the financial position of the owner(s).

The Financial Projections

The second part of a business plan are the financial projections. How much do you need to invest, how much do you think you will sell, what will the expenses be, what will be the profit, how is your cash flow going to be, what will your balance sheet show after 1, 2, 3 or 5 years? These are questions that your financial projections will have to show to be credible. There are only a few programs out there that will actually address all the details, and then most of those, do not address the thousands of details involved. From my experience there is one financial solution that addresses most of the details, and provides near-to-reality financials, and you guessed it, PlanMagic Business or other PlanMagic program aimed at a specific business. With the financial engine of PlanMagic Corporation, you can

• plan any business like a pro
• plan to finance any business start-up or expansion
• surprise any potential investor with a thorough and complete presentation
• analyze the financial situation with state-of-the-art analysis tools
• stay up-to-date with the real financial situation at all times
• unlimited what-if and other analyses for 5 years without loss of data

Some PlanMagic key advantages

• Includes wizards to simplify and significantly speed up data entry.
• Performs validation checks for data consistency.
• Fiscal year and forecasts can start in any month.
• Forecasts include months, quarters, and years.
• Up to 5 years can be forecast in one financial workbook, with no limit if multiple workbooks are used.
• Views are collapsible for clear summaries.
• Costs can be split between fixed and variable cost for contribution, break-even and similar analyses.
• Projected balance sheets that are always balanced.
• More than 40 charts illustrate trends in expenses, sales, revenues, cashflow and more.
• The most advanced analysis tools available today.

Copyright 1997 (c) PlanMagic Corporation. All rights reserved.

Contributed by JD at 10:05 am under Business development.