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Article The easy way to write a focused business plan

Write it like this for a plan that works

Does your business have a written business plan? It’s never too late to write one, and it’s a worthwhile exercise because it can reveal opportunities and challenges you might not otherwise see.

But writing a business plan is especially important if you’re going to be pitching it to potential lenders, investors or partners. They all want to know One Big Thing about your business: how it’s going to succeed. Your business plan should make this One Big Thing very, very clear.

You can find lots of great resources online for writing your business plan, including templates and sample plans. Most sources give you a structure to follow that looks something like this:

  • Executive summary
  • Description
  • Market
  • Organization
  • Product or service
  • Marketing plan
  • Financials

This is a good structure for presenting your plan. But it’s not the best order for actually writing it. Instead, try going from macro to micro. Start with the big picture — the market — and then zero in on your specific business, leaving its nitty gritty details for last.

The reason to write it in this order is because it can help keep your plan focused on the One Big Thing — how your business will succeed. Everything in your plan should ladder up to this. We’ll show you what we mean.

1. The market

For this part, do your research. Go online to examine your best competitors and see what they’re doing that’s making them successful. If you have a retail business, go and visit your competitors’ stores. What customers are they targeting? How are they reaching them? What problems are they solving for them?

Look for the common trends in your industry, but also look at how the really good competitors are differentiating themselves from each other in ways that their customers care about. Describe all of this in the Market section of your plan.

2. Description

Now that you’ve painted the big picture, next you’ll start to hone in on your own business. Explain what customers you’re targeting and what problem or need you’re addressing for them. Explain very clearly how you’re doing this differently from your competitors, and why that difference matters to your customers.

Two things should be very clear in this section: the reason for your business to exist and your competitive advantage over the competition. They should add up to the One Big Thing you need to prove: how your business will succeed.

3. Product or service

What are you selling, exactly? Describe it in detail. Where does it come from? Are you developing it yourself? How is it created? Is there intellectual property you need to protect? Do you need to do research and development?

The product or service you’re describing needs to ladder up to the problem or need you described in the last section. You need to “connect the dots” and make it very clear how the thing you’re selling solves the need that exists in the market.

4. Marketing plan

How are you going to sell your product or service? What channels will you use to communicate its benefits to your target customers? Are you going to take market share from a competitor — if so, whom? And how? Or maybe you’re going to grow the category and get new customers to engage in it for the first time. How will you do that?

In this section, be sure to echo the competitive advantage you laid out in the Description section, and explain how you’re going to communicate it to the people you need to reach.

5. Organization

Next, talk about who is going to make it all happen. Describe how your business is structured, including the legal structure — is it incorporated, or a partnership, an LLC or some other structure?

You can include an org chart in this section. Explain who is in each role and why they are qualified to perform that role successfully. Résumés or CVs of team members can go in here too, or you can add them to an appendix at the end of the plan.

6. Financials

In this section you’ll explain how all of this works financially. Here you’ll account for the costs and income associated with selling your product or service, the cost of activities in your Marketing section, and the salaries of the folks in your Organization section.

Include a five-year projection of revenue and expenses. If you’re writing a business plan for an existing business, include financial statements for the past five years. When will your business start to turn a profit?

Explain all the numbers and where they’re coming from. It all has to make sense — and the One Big Thing in your Description section should support your projections.

7. Executive summary

We saved the first part of your business plan for last: the executive summary. If you write it at the end, it will pretty much write itself. In this section, you’ll articulate your One Big Thing, which by now should be easy to do. This statement should be simple and direct. Try to be as specific and precise as you can while using as few words as possible.

After that, sum up each of the previously written sections. Think one sentence per section. When you’re finished, you should have a cohesive paragraph that sums up your whole plan. Read it out loud to make sure it flows; you may need to add some transitional words here and there.

You can finish your plan with an appendix that includes résumés, as we mentioned earlier, along with examples of marketing creative, copies of legal filings, detailed financial charts, or any other relevant supporting documents.

Now all you need to do is re-order the sections to mirror the list we started out with, executive summary first. You should end up with a business plan that is focused, convincing and compelling.