Many great companies had their starts on paper, in the form of a plan may be seen as a valuable tool to be used to convey the mission and prospects of the business to customers, suppliers or others. However, it’s a mistake to think that only cash-starved startups need business plans.
Which kind of business plan you should be preparing? Business plans come in several forms, and before you start writing, you may want to determine whether a one- or two-page summary might do the trick. A summary business plan is a document typically less than 10 pages. There are predictable contents of a standard business plan outline. A synopsis might best be described as an executive summary on steroids. A complete operational plan may be 50 or more pages, going into details about sales, production, and distribution, management, offering guidelines to key managers, and perhaps also to all employees.
An executive summary is essentially a business plan in miniature and shouldn’t be longer than two pages. Include industry marketing data to back up the marketing section, detailing about features and product warranties description, full financial projections and budgets allocations for at least three to five years ahead. Also include management strategies and responsibilities with dates and cash flow projections.
If you are searching for funding—whether from venture capitalists, investors, bankers, or even friends and family—one of the first requests you’ll receive is this: “Send along your business plan.” But be prepared.
Before you hang up the phone or acknowledge the e-mails, you may want to ask one question: “What type of business plan do you want me to send?” If the prospective backers are truly interested, they may come back with the question: “Do you have any more detail or further information to make us convinced with your proposal that you presented to us?”
But it must go beyond simply addressing these issues in factual format like an abstract or an outline, as if hitting items on a list. When entrepreneurs seek funding for a new venture, potential investors often want to see a business plan. The precise business plan format can vary.
A business plan should be a work-in-progress.. Just keep in mind that whatever type of document you send, it must do more than simply describe your business—it must also sell you and your business and convince the backer you have what it takes to make the business succeed over the long-term.