This post is a piggy back from one I wrote last year about why I wrote a business plan and you can read that article here. This post will detail tips for how to write an effective business plan so let’s get to it!
When I knew that I wanted to be self-employed, I drafted my business plan. I didn’t know much about what to put it in so I included things like: the type of projects I would work on, price list for the service, policies and procedures, and best practices. As the years passed (I’ve been self-employed since 1999), I had to go back and change my business plan several times.
Having a documented business plan I found is important even if you don’t plan to seek lending. There are other great uses for a business plan like: (a) you’ll have a way to see if what you’re doing is successful, (b) you’ll be able to track your growth, and (c) it’ll be easy to see where you’ll have to make changes if necessary.
A business plan will be different depending on what you need it for. In my case, I used it to help me stay on top of my daily operations and my long-term goals.
Now, if you are going to approach a lender, your business plan will look a lot different than mine. If you are considering beginning a start-up business, I highly recommend you have a plan outlined on paper. It can contain many items but most importantly, the mission and purpose for your business.
- Are you a product or service-based company?
- What products and/or services will you provide and how?
- What type of clients are you targeting and why?
- Will you be a sole proprietor, partnership, or corporation?
- How much money will you need to get started and can you prove how you will pay it back? How long will it take to pay if back?
- Will you have employees? If so, how many and how much will you pay them?
Many lenders will also want to know if you have a 5 to 10-year plan for how you perceive your business will grow. So, a lot of thought, research, and time is needed. I won’t go into the specifics of business loans and what not, this post is more less about the importance of having a business plan for your business.
A business plan is also essential if you’re in charge of or will start a non-profit organization. And in this case, your business plan may be in the form of grant writing. Most times for non-profits, a written proposal is also necessary.
In the end, you’ll be very happy to have your business plan in writing and if circumstances change, it’s easier to go back and make edits.
For more information on business plans check out the following resources from our Amazon reading list (the resources below are affiliate links which means if you purchase either or both these books, we will receive a small commission at no additional cost to you. We use that to help run our small business. We appreciate your support!)