Alaska Small Business Development Center

Guidelines for Preparing a Business Plan

Define your objectives for producing the business plan. Who is going to read the plan and what do you want them to do? The objectives can help you decide how much emphasis to put on various sections of the business plan.

Allocate enough time and resources to thoroughly research your business plan. A business plan is only as good as the research that went into producing it. For example, you will have to do research in order to find out more about your industry your potential customers, your potential competitors and your potential sales and costs.

Show drafts of your business plan to others. It can be very useful to get feedback on your draft business plan from various people, including persons associated with the business as well as others you feel could provide unbiased input.

Write your own business plan. One common mistake made by entrepreneurs is to borrow heavily from a sample business plan and simply change the names and information found there. It is very important that sections of the business plan reflect what is important to your particular business. Secondly, a good business plan should flow together like a good story, with the sections working together to demonstrate why the business will be successful. Business plans which borrow too heavily from other business plans tend to be disjointed with some sections contradicting others and some key issues addressed much too briefly.

Outline the key points you want to make in each section before you start writing. Review your outline to ensure that your sections are consistent with each other, that there is little duplication, and that all the key issues have been addressed.

Make sure your financial projections are believable. For many readers, the financial section is the most important section of the business plan because it identifies your financing needs and shows the profit potential of your business. In addition a good financial plan will give the reader confidence that you really understand your business. So be sure to test the reasonableness of each of your assumptions. Overly optimistic assumptions or a failure to accurately reflect the full costs of operation can quickly destroy the credibility of your business plan.

Do the Executive Summary last. The executive Summary can be the most important section of your business plan because people will read it first and it may be the only section they read. The keys to a good executive summary are that it should be short (2 pages at most), highlighting what is important in your plan. It should get the reader excited about your business.

You may want to take a business planning seminar offered in your area. There are also some very comprehensive software programs on the market to assist you.