Writing a Business Plan for Investors

CHAPTER ONE

Whoever said you don’t need a formal business plan to start or expand your business was certainly not addressing those who need funds from creditors and investors.
Like many successful businesses have done, you can launch your business idea without the benefit of a formal business plan—but this applies only if you have all the funds you need or you are just testing the business waters to see how it turns out.

 

Why You Need a Business Plan for your Small Business

Writing your business plan is not the end of your business planning process because business planning is a never ending process. However, it’s an important intermediate stage (failing to plan can mean planning to fail).
If you are just starting a business, having a well-written business plan shows that you have really done your homework. And if you are planning to expand an already established business, it demonstrates that you have carefully considered the pros, cons and odds; and focused on the development of the business.
If you are risking your capital, time, resources and effort to start a business; then you certainly need a business plan to help you mitigate against the risk involved. If you are already a business owner but you started out without a business plan, then you definitely need to invest in getting a business plan; especially if you want to take your business to the next level.
If you would need to obtain financing from third parties either now or in future, then a business plan is indispensable, as it sells your idea and elucidates the opportunities it presents. It arranges strategic alliances, attracts key employees, boosts your confidence, and helps you remain focused. From the table of contents to the financial tables, a business plan covers a lot of ground.
A formal business plan is just as important for an established business, whether small or big, as it is for a startup. And it serves the following critical purposes:

• It helps you clarify, focus, and research the prospects of your proposed startup or expansion idea.
• It provides a considered and logical framework within which your business can develop and pursue business strategies over the next few years.
• It offers a benchmark against which you can measure and review the actual performance of your business.
• It serves as the basis for discussion with third parties such as creditors, investors, shareholders, agencies, etc. (This, of course, is the main reason why we are discussing business plan writing in this eBook).

Just as no two businesses are alike, so also are business plans; some aspects of a plan will be more relevant to some businesses than to others. So, it is very important to tailor the contents of a business plan to suit individual circumstances. Nonetheless, most business plans follow a well-tried and tested structure, and general advice on preparing a business plan is universally applicable.
However, your business plan should be a realistic view of your expectations and long-term objectives for your startup or small business. It provides the framework within which it must operate and, ultimately, succeed or fail.
For you and other entrepreneurs seeking third-party support, the business plan is the most important sales document that you will need to raise finance for your startup or small business. Although preparing a solid, comprehensive business plan will not guarantee success in raising funds or mobilizing support for your business, lacking one will always result in failure.

 The Importance of Strategic Business Planning

Writing a business plan is no doubt a hard task. But it’s very essential, and it comes with lots of long-term benefits. The planning process forces you to understand more clearly what you want to achieve as well as how and when to take each step towards achieving it.
Even if you don’t need financial support from third-parties, a business plan can play a vital role on helping you avoid mistakes or recognize hidden opportunities and challenges. Of course, it is much easier to fold a sheet of paper than it is to fold a business.
Now how can you make your executive summary stand out? What are the most important details to include in the different sections of your plan? How do you present financial projections? You will get answers to these and other questions in this chapter.

 Why I Wrote this Small Business Plan Guide

 

Over the years, I have met different individuals with brilliant business ideas roughly sketched on paper. But when I asked these individuals of their business plan, the usual reply I get is this:

• I don’t know how to write a business plan
• I don’t have time to write a business plan now, maybe some other time
• I don’t have money to hire a business consultant to write a plan for me

If you have ever bore any of the thoughts above in your mind, then you are the reason I wrote this eBook. I want to take the stress of writing a business plan away from you and most importantly, I want to teach you how to write your own personal business plan without hiring anyone. This is the sole reason why I wrote this eBook.
Yes, the reason I called it a personal business plan is because a business plan should be personal. A business plan should not just be a file or document, it should be your dream in written form. In fact, I advocate that you write your business plan yourself ; so that it will be engraved in your heart.

 My Business Plan is Me

 

Now using myself as an instance, if you wake me up in the dead of the night, or you happen to run into me in a restaurant or fast food outlet and you ask me about my business; I will tell you everything you need to know about it. In fact, I don’t need to look into a book or tablet to do a business plan presentation to investors or lenders; I will just talk off-hand without memorizing or rehearsing anything. Why?
The reason is because I wrote the business plan myself. Yea, I may work with an accountant or attorney to get the technical facts I need but the bulk work will be done by me. This is the level I want you to aspire to, especially if you are just starting your first business.

 Who I Wrote this Business Plan Guide for

 

I wrote this eBook for three set of individuals:

• Entrepreneurs who are just starting out in business and want to write their own business plan
• Established business owners who want to expand their businesses and need a business plan
• Those seeking funds (grants, loans or equity) to finance their business project

7 Tools You Need to Write a Business Plan

To ensure a smooth writing and planning process, there are certain tools you need. Example of these tools are:

1. A Pen
2. A book
3. A laptop or desktop computer or tablet
4. Microsoft Excel spreadsheet
5. Electronic calculator
6. Pre-made business plan templates
7. A business plan software