You’ve got a great idea for a new product or service—how can you persuade investors to support it? Flashy PowerPoint slides aren’t enough; you need a winning business plan. A compelling plan accurately reflects the viewpoints of your three key constituencies: the market, potential investors, and the producer (the entrepreneur or inventor of the new offering).

But too many plans are written solely from the perspective of the producer. The problem is that, unless you’ve got your own capital to finance your venture, the only way you’ll get the funding you need is to satisfy the market’s and investors’ needs.

The question shouldn’t be IF you write your plan, but how to write a business plan that will take your company where you want to go. Your business plan is essentially your answers to a.

Here’s how to grab their attention.

The Idea in Practice

The six components of a business Plan 1. Executive summary. The executive summary is an overview of your business and your plans. It comes first in your plan. The opportunity section answers these questions: What are you actually selling and how are you solving a. Many people see writing a business plan as a 'necessary evil' required to attract financing or investors. Instead, see your plan as a no-cost way to explore the viability of your potential. More Tips for Writing a Business Plan. Writing your business plan is going to take work. But once it’s done, it’ll help provide direction, focus and organization to your operation. This will only help you achieve even more success. Some more tips to consider when writing your plan include: Do your market research first.

Emphasize Market Needs

To make a convincing case that a substantial market exists, establish market interest and document your claims.

Establish market interest. Provide evidence that customers are intrigued by your claims about the benefits of the new product or service:

• Let some customers use a product prototype; then get written evaluations.

• Offer the product to a few potential customers at a deep discount if they pay part of the production cost. This lets you determine whether potential buyers even exist.

• Use “reference installations”—statements from initial users, sales reps, distributors, and would-be customers who have seen the product demonstrated.

Document your claims. You’ve established market interest. Now use data to support your assertions about potential growth rates of sales and profits.

• Specify the number of potential customers, the size of their businesses, and the size that is most appropriate to your offering. Remember: Bigger isn’t necessarily better; e.g., saving $10,000 per year in chemical use may mean a lot to a modest company but not to a Du Pont.

• Show the nature of the industry; e.g., franchised weight-loss clinics might grow fast, but they can decline rapidly when competition stiffens. State how you will continually innovate to survive.

• Project realistic growth rates at which customers will accept—and buy—your offering. From there, assemble a credible sales plan and project plant and staffing needs.

Address Investor Needs

Cashing out. Show when and how investors may liquidate their holdings. Venture capital firms usually want to cash out in three to seven years; professional investors look for a large capital appreciation.

Making sound projections. Give realistic, five-year forecasts of profitability. Don’t skimp on the numbers, get overly optimistic about them, or blanket your plan with a smog of figures covering every possible variation.

The price. To figure out how much to invest in your offering, investors calculate your company’s value on the basis of results expected five years after they invest. They’ll want a 35 to 40% return for mature companies—up to 60% for less mature ventures. To make a convincing case for a rich return, get a product in the hands of representative customers—and demonstrate substantial market interest.

Every business owner needs to establish a direction for their company. Luckily, you can do just that by creating a business plan. It serves as a roadmap for how to structure, run and grow your operation. It helps you:

• Plan for the future
• Establish clear goals
• Find weaknesses you can address

It can even help you get funding or express your business idea to investors if you’re trying to start a business. But how do you create a business plan? To find out, read through the steps below:

How to Write a Business Plan Step by Step

1. Executive Summary

Your executive summary explains who your company is and why it will be successful. In this section, you’ll want to briefly explain your product or services and company’s structure.

If you’re writing your business plan to ask for financing from investors, you’ll want to include high-level financial information. You can also mention your growth plan and then elaborate on it later to provide more in-depth details.

The executive summary is also the place to outline and explain your company’s goals. This helps document your business’ direction. Keep in mind that this section of your business plan shouldn’t be over two pages in length. You’ll want it to be a quick read for someone who doesn’t have time to look through the whole report.

2. Company Details

This section of your business plan should start by outlining your industry. So if you own a store, you’ll want to discuss your retail environment in detail. You can also highlight any expertise or experience you have within your industry. So, if you own a jewelry store and have years of experience making items, be sure to highlight that.

When discussing your industry, include details about your competitors. You’ll want to mention their products and services, but it’s okay to keep it brief in this section. You’ll elaborate more about competitors in your marketing section of the plan.

3. Description of Products or Services

Your lineup of products and services is one of the most important aspects of your business. So, in this section of your plan, you’ll want to include a detailed description of them. Be sure to specify how each will benefit your customers and why they need them. You’ll also want to detail:

• Cost
• Features
• Distribution
• Target market
• Competing products

4. Market Analysis & Strategy

Before you write your business plan, you should conduct thorough market research. This will include what your customers’ needs and preferences are. This will help you define your target market. And once you know who your clients are, you can conduct your research by:

How To Write A Business Plan Pdf

• Giving out customer surveys and questionnaires
• Holding focus groups and in-depth interviews
• Looking at existing studies for your industry
• Finding out what your customers are saying on social media
• Seeing how many alternative products exist and how much people pay for them
• Looking into the income range and location of your potential clients

Your marketing plan is also a good spot to highlight your strengths and weaknesses. You can even use a Strengths, Weaknesses, Opportunities and Threats (SWOT) analysis. These can help you see clearly what areas of your operation need improvement.

5. Company Organization & Management

The success of your business will depend on the people that run it. So you’ll want to make sure you include an organizational chart with departmental descriptions and your management team. You’ll also want to list any board members or advisors.

How To Write A Business Plan Free

Typically, this section features your employees’:

• Photos
• Contact information
• Job titles

Having a clearly outlined organizational chart is also helpful for managing your employees and making sure the internal structure of your company is efficient.

6. Financial Plan

Generally, it’s a good idea to get your accountant’s help when you create the financial planning section of your business plan. You’ll want their expertise as you document your company’s:

• Financial projections
• Budget estimates

Some key financial elements you may want to include are your:

• Financial statements
• Cash flow projections
• Sales revenue estimates for each quarter and year
• Expenses

Writing a Business Plan: Use a Template

Not sure how to write a business plan template? There are several different ways that business owners and small businesses can outline their plans. You can utilize our small business template or you can also use the Small Business Administration’s (SBA) guide or Service Corps of Retired Executives (SCORE) template.

Check out our business plan template.

More Tips for Writing a Business Plan

Writing your business plan is going to take work. But once it’s done, it’ll help provide direction, focus and organization to your operation. This will only help you achieve even more success.

Some more tips to consider when writing your plan include:

• Do your market research first. This can help you learn more about your customers and target audience, which is relevant to other sections throughout your plan. It’ll also gives you insight into your competitors and industry.
• Write for your audience. This makes your document more relatable to those that read it.
• Keep it short. Making your plan concise will help others not only understand it but also remember it. This is important for gaining investors and for helping your workforce put your plan into action.
• Have someone review it. Ideally, you should proofread your document more than once. You may even want your employees to look through it to see if they have anything to add or edit.
• Remember to use it. After all this work, you don’t want to just file it away and forget about it.

How To Write A Business Plan Step By Step

Whether your business is new or old, has an existing business plan or still needs one, you’ll want to spend some time either creating a plan or making sure yours is up to date. Not only will it add focus, direction and unity in your operation, but it’ll help you stay successful for years to come.

How To Write A Business Plan Sba

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