Are You Also Making This Mistake When Writing a Business Plan?

All entrepreneurs are told to write a business plan for the concept before bringing it to life. Naturally, they oblige and get working hard at it.

The first step is to seek an outline from books or the Internet through websites such as Bplans.com. Some entrepreneurs just hire the services of a professional to do all the writing.

A typical business plan outline looks like the one below:

Summary

Business concept

Current situation

Key success factors

Financial situation/needs

Vision

Vision statement

Milestones

Market analysis

The overall market

Changes in the market

Market segments

Target market and customers

Customer characteristics

Customer needs

Customer buying decisions

Competitive analysis

Industry overview

Nature of competition

Changes in the industry

Primary competitors

Competitive products/services

Opportunities

Threats and risks

Strategy

Key competitive capabilities

Key competitive weaknesses

Strategy

Implementing strategy

Products/services

Product/service description

Positioning of products/services

Competitive evaluation of products/services

Future products/services

Marketing and sales

Marketing strategy

Sales tactics

Advertising

Promotions/incentives

Publicity

Trade shows

Operations

Key personnel

Organizational structure

Human resources plan

Product/service delivery

Customer service/support

Facilities

Creating the financials of the business plan

Assumptions and comments

Starting balance sheet

Profit-and-loss projection

Cash flow projection

Balance sheet projection

Ratios and analyses

Credit for this business plan outline should be given to Inc, an entrepreneur’s must-read business magazine. It’s full of awesome marketing ideas and interviews with successful entrepreneurs who gladly and generously share their early-stage journey.

Photo Courtesy: juhansonin

If you head to BPlans.com, other websites that offer software, paid or free samples or templates or if you go through the hundred of books that show entrepreneurs how to write a business plan, the outline or format will always be more or less the same.

What’s the number one question that people will ask the entrepreneur when she or he presents the idea or completed business plan to them?
It may come in different shapes but essentially, they will ask: “What is going to make your idea work?”.

Such a question will come mainly from skeptical friends, prospective business partners and investors to mention a few stakeholders.

This is where you as en entrepreneur will have to explain to them about your competitive plan or how you plan on getting noticed and attracting customers or clients in an already existing market.

What usually sells the stakeholders onto your idea is its feasibility. They want to know why they should invest their time, money and hope in your and your idea. I will also remind some early-stage entrepreneurs that a business plan will also sell you on your idea. It will reveal the strengths and flaws of your idea in an objective manner.

Once the stakeholders are sold onto the idea, other important elements such as products and services, personnel and even finances become secondary details.

Why are business plans outlined in a way that strategy is not one of the first elements that readers come across?

I personally believe that in writing a business plan, strategy should be included in the summary. I understand that it cannot be a lengthy piece but a convincing paragraph to right away sell the reader onto the concept. The key success factors can then be added to prove to the reader that the idea is solid and worth pursuing.

So any business plan outline I craft will look like this (and usually, that’s the only part I write… if people are sold onto the idea, I write the other part later. That’s another article though but in a nutshell, I have found that a well presented idea can take one page and not the 40 pages or so that some entrepreneurs dedicate to writing a conventional business plan):

Summary

Business concept

Current situation

Strategy or game plan

Key success factors

Financial situation/needs

A business plan should be more than a dull essay with numbers and promises that everyone make. It should be a sales tool that helps sell your concept onto the intended audience.

Don’t make the mistake of hiding the part about how your idea is going to take over and reach the numero uno spot. Business plan readers are smart (usually). Once they see the potential of the idea and how it can grow into something that rivals an institution, they will be more receptive to the other elements such as start-up capital needed.