Useful guidelines for writing a good business plan

Nobody plans to fail in business and yet it is surprising how many fail to plan well or how many good plans just are not communicated well.

Having a well-conceived plan is crucial for any successful business venture whether you are soliciting financing or other support. It is important to ensure your plan is communicated clearly to others both inside and outside your organization if you want to get the support you need.

What goes into your plan obviously depends on what the challenge is that you are addressing. Bankers and financiers understandably want to see the numbers you are projecting — but most importantly they want to know who the people involved are and what their credentials are. They want to learn about the management team and the expertise they each bring to the table. A concise review of the skills, experience and talent you have on your team will give the reader confidence. They already know there is a risk involved, but what they need to know is how your group is going to mitigate that risk and in time generate a return on their investment.

It is crucial to communicate why your plan is going to work with confidence and how your solution will succeed in the markets you are in.

It is essential that you get the research done to establish what customers want, ask for and will buy — as opposed to just telling people what you are going to make or do. Don’t waffle. Succinctly state the facts.

The key to putting a good plan or report in writing is to keep the desired goal or objective simple, clear and plainly written. Get to the point you want or have to make. Many people have great difficulty doing this and go on and on about things that just muddies the waters and confuses more than anything else. It is important to be succinct. A good report isn’t measured by weight or how pretty it looks; the number of pages should be irrelevant. Similarly a good presentation slideshow shouldn’t swamp the audience with numbers that distract or confuse. Make your plan and objective very clear so people understand what you are talking about and carry on from there. Just remember that a plan is just a suggestion or recommendation until you get it approved.

To start I suggest quickly summarizing what your business does (or is going to do) in 50-words that sell. Try it. It’s not that easy. Written concisely you will create a strong sales tool that is usually a lot better than most “vision” or mission statements. It will also be easier for all your associates to understand and relate their contribution to their work in your organization. This also means that when the word gets out from anywhere, anytime, you can rest assured that your people are all playing from the same songsheet which is more than useful!

An interesting exercise is to get a group of key associates together and to get them to do the same thing. Ask them what the business does? This will undoubtedly expose variances in what they think or believe the organization’s purpose and/or goals are from their perspective. You may be surprised when you read their responses. Your key people will all be more productive, effective and useful when they understand the purpose of the overall mission and it’s objectives — and it is then a lot easier for you to measure their contributions and the performance and success of your venture.

Here’s an example of what my small business does and how we explain it to others:

  • We are a management consulting and marketing services firm.
  • Our work makes money for our clients by improving their sales and productivity.
  • We design and produce effective and clear marketing communications including creative Internet website applications, collateral material, market research, presentation skills training and professional writing/PR services.

By keeping the basic message straight, short and simple, you can quickly deliver an “elevator pitch” and generate an accurate, positive impression wherever you are!

A great way to illustrate the point is at some social event. You may be lining up at the bar or buffet in a group of strangers or sitting at a table where you have been placed. That’s when you get the questions, ‘So who are you? What do you do? What does your business do?’ If everyone on your team understands and essentially gives a consistent answer to that question, you and your organization are going to be successful!

At this point you can start to write your “Action Plan”. This is a document that outlines in stages how you are going to achieve your objective. Remember who you are writing it for and never lose sight of that. They will do one of three things: approve it, request refinements or reject it.

Thus, anything that makes their decision more difficult or doesn’t make things crystal clear for them is going to impede things and make it harder for you to succeed. Edit ruthlessly to get rid of all or any irrelevancies. Stay on point. If you have to handle what in fact is a secondary issue, mention it by all means, but add it at the end of your presentation in an appendix.

Establish your facts. I recommend you refine them to answer one question: “Where are we at?”. It is important not to answer the other question of: “How did we get here?”. The former addresses your reality. The latter will stir up a pile of conflicting points and debate. Look at it this way: if you were parachuted into a combat area, would you debate who started this action or simply focus on your mission?

Keep your selection of facts focussed on those that directly impact on your challenge. Outline the issues such as the following: What’s happening in the market? What new products or technologies are being introduced? What is our competition doing? What is the economic climate doing now and will that change anytime soon? Is that threatening or does it present an opportunity? Do we have a pool of available labour? Do we have high speed internet access readily available? etc. etc.

You will need to look at financial issues of course including sales, supply chains, margins and profitability. You may also need to review the political situation and economy in terms of how they directly affect your operations. Outline any trends you know are impacting. You will undoubtedly need a mix of these and other key issues in your plan to then outline your conclusions. Draw deeply by “learning from others” who have faced similar situations. If you observe trends and performance patterns that will help a decision-maker, explain them. In other words help them make good decisions and show how, given the facts you present, why your approach to your challenge is the best.

Whatever you do, make sure to link all your facts so the reader understands how everything goes together in logical order. You don’t want at the end of the day to find people — yours and others supporting your cause — misunderstood and made errors, assumptions or mistakes with the best of intentions because they didn’t appreciate or understand the task at hand and the action you wanted them to make.

The bottom lines are crucial of course. You need to be very clear about the directions you are going to take. Again, keep it simple. You are trying to get approvals or buy-ins, so help the reader understand the upside and downside risks involved. Be realistic in your assessment. Think of questions you think will come up and anticipate them by answering them before someone puts you on the spot. If you know of a serious matter for instance that possibly could have dramatic impact (such as the tsunami in Japan that disrupted supply chains or heavy snows shutting down cities) you should outline them.

If you have a particularly contentious subject that could be a distinct concern, you might consider explaining both sides (as you see them) — the pros and cons — the upsides and downsides. In other words face the facts and be open in your evaluation.

The final element is to write your summation with your recommendations and clearly state your position to address the issue(s) raised in a way that expresses your enthusiasm and confidence — and encourages the support you need to move forward.

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