Business Plan

A business plan guide is a great place to start when you are getting ready to write your first business plan. Perhaps you have found a book about writing business plans, or are following a template, but chances are, these materials will only focus on the steps necessary to create your business plan and will fail to point out the critical mistakes that most new business owners make. So let's ignore the step-by-step tutorial for a moment and focus on the real world mistakes you need to avoid.

1. Don't Put it Off.

Yes, writing a business plan can be a monumental chore. It's easy to procrastinate while you focus on the more exciting processes of your business. Many new business owners will wait until the day before their scheduled meeting with the bank -- and then frantically try to write a plan overnight. You can imagine the results.

Don't wait until you have more time. There will never be more time. You need to clear your calendar for a week and make your business plan a top priority. Or if that isn't feasible, schedule a certain period of time each day to work specifically on planning. No doubt you have heard the old saying: "If you fail to plan, you are planning to fail".

2. Don't Confuse Profit With Cash Flow.

Unless you have an accounting background, you are very likely to define the success of your business in terms of profits. A simple definition of Profit would be Sales minus Expenses equals Profit. But in the business world, profits do not equate to cash. Your profit formula does not take into account the amount of cash you have tied up in production costs for products that have not yet sold, or the customers who still owe you money for sales that have already been made. Your business can look quite "profitable" while your bank account is over-drawn.

Make sure your business plan includes a table that addresses cash flow. Ideally, you should detail the monthly cash flow for the first two years of the business and annually thereafter.

3. Don't Fall in Love With Your Idea.
Too many business plans blabber on for pages about the "newness" and "uniqueness" of the idea. But the truth is, investors want to invest in people, not ideas. It is only the people who can execute the systems necessary to bring the idea to life.

Instead of waxing poetically about your business idea, focus your energy, and your reader's eyes, on the ways you plan to implement this great business idea.

4. Don't Succumb to Fear and Dread.

If you have never written a business plan, the process may loom like Mount Everest. But, like most new challenges, writing a business plan isn't as hard as you have imagined it to be. You aren't writing a doctoral thesis or the next great novel. If you have invested in a business plan guide, use it. You can easily find helpful resources such as books, software programs and templates. Remember, you eat an elephant one bite at a time, so start chewing.

5. Don't Over Sell.

Skip the vague and meaningless business phrases such as "best ever", "highest quality" and "unsurpassed customer service". You will lose your reader's interest and respect if you engage in hyperbole that isn't supported by measurable facts. Remember that the objective of a plan is its results, which require tracking and follow up. Focus your goals on specific dates, management responsibilities, budgets, and measurable milestones. Think fewer words and more numbers.

6. Don't Engage in One-Size-Fits-All

Business plans can have many different purposes and they should be written to reflect the specific purpose at hand. You may be using your plan to start a business, or just run a business better. Your purpose may be simply to sell an idea for a new business to one particular business partner. Your plan may be intended to secure a small business loan, or it may be needed to secure millions of dollars of venture capital. Each of these purposes would require different information, presented in different ways to meet the needs of different readers. Keep a picture of your intended reader firmly in your mind and your business plan will stay focused as well.

7. Take Off the Rose Colored Glasses
Optimism is a wonderful resource. Without it, a business owner would find it difficult to summon the energy necessary to launch a new venture. However, this is not the time to engage in unbridled projections. If your company's growth chart is based on an "industry average" of 15% annual growth, you should certainly be prepared to prove that assumption. When in doubt, be less optimistic.

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Home based business owners should use software and resources to help develop their business plans. There are a number of different tools that can be helpful in designing a home based business plan.

There is a very useful multimedia online tutorial from CIT Small Business Lending Corporation that goes through an explanation of what your business plan is about. It may also be helpful to look at some sample business plans to fid out what they look like. You may be able to incorporate your ideas into them.

There is also software that you can use to help with your business plan. Planware is a business planning software

tool that can help you get a feel for what you want to have in a business plan

. There are some free trails that you can take advantage of. If you like what you see you can purchase the software and help draw up your business plan.

Business Plan Pro is software that has great tips on starting up your business plan. Plan Write is another helpful tool that will guide you through the entire business plan process. You will be able to construct marketing plans as well.

BizPlanBuilder is a software that works with Microsoft Word and Excel. You can make up business plans and create some sample business plans. There are also features that you can use on the Internet that work to help you with finances.

Plan Magic is another business plan construction tool that is available. It allows you to create a couple of different business plans and has excellent specialty versions that you can use for specific businesses. This is especially helpful because you can get a feel for what it will be like to write a business plan for a particular business type.

Venture Planning System Pro can be downloaded online. It is a service that you can get through Advantage Venture Systems. You can use the ten day free trial and get a subscription later on if you want.

Business Planner Pro is a good tool to plan your business plan out on. You ill need to have Microsoft Word 2003 and Excel 2003. Analyzing risks and other possibilities can be done with this tool. It is excellent for people that are not the familiar with business plans.

No matter what tool you use you have to have a good strong business plan in order. If you are not able to use any of the tools you should get an opinion about your business plan from a financial planner or small business owner. It is vital that your business plan takes everything that is necessary for a business plan to work into consideration.

Jeffrey S. Dutt - About the Author:

Jeff is an affiliate marketer who owns DuttmarketingThe Website offers offers several top paying affiliate programs. These programs also offer the best business building tools and education available on the internet. You can view his Blog here Affiliate Marketing

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Labels: business, business phone, business plan, business plan guide, how to write a business plan, writing business plans