How To Prepare A Business Plan That Guarantees Big Profits

Success in business comes as a result of planning. You have tohave a detailed, written plan that shows what the ultimate goalis, the reason for the goal, and each milestone that must bepassed in order to reach your goal.
A business plan is written definition of, and operational planfor achieving your goal. You need a complete butsuccess tool in order to define your basic product, incomeobjectives and specific operating procedures. YOU HAVE TO HAVE ABUSINESS PLAN to attract investors, obtain financing and holdonto the confidence of your creditors, particularly in times ofcash flow shortages--in this instance, the amount of money youhave on hand compared with the expenses that must be met.
Aside from an overall directional policy for the production,sales effort and profit goals of your product--your basic "travelguide" to business success--the most important purpose yourbusiness plan will serve, will be the basis or foundation of anyfinancial proposals you submit. Many entrepreneurs are under themistaken impression that a business plan is the same as afinancial proposal, or that a financial proposal constitutes abusiness plan. This is just a misunderstanding of the uses ofthese two separate and different business success aids.
The business plan is a long range "map" to guide your businessto the goal you've set for it. The plan details the what, why,where, how and when, of your business--the success planning ofyour company.
Your financial proposal is a request for money based upon yourbusiness plan--your business history and objectives.
Understand the differences. They are closely related, but theyare not interchangeable.
Writing and putting together a "winning" business plan takesstudy, research and time, so don't try to do it all in just oneor two days.
The easiest way to start with a loose leaf notebook, plenty ofpaper, pencils, pencil sharpener, and several erasers. Once youget your mind "in gear" and begin thinking about your businessplan, "10,000 thoughts and ideas per minute" will begin racingthru your mind...So, it's a good idea when you aren't actuallyworking on your business plan, to carry a pocket notebook and jotdown those business ideas as they come to you--ideas for salespromotion, recruiting distributors, and any other thoughts on howto operate and/or build your business.
Later, when you're actually working on your business plan, youcan take out this "idea notebook" evaluate your ideas, reworkthem, refine them, and integrate them into the overall "bigpicture" of your business plan.
The best business plans for even the smallest businesses run 25to 30 pages or more, so you'll need to "title" each page andarrange the different aspects of your business plan into"chapters." The format should pretty much run as follows:
Title Page Statement of Purpose Table of Contents Business Description Market Analysis Competition Business Location Management Current Financial Records Explanation of Plans For Growth Projected Profit & Loss/Operating Figures Explanation of Financing for Growth Documentation Summary of Business & Outlook for The Future Listing of Business & personal References
This is a logical organization of the information everybusiness plan should cover. I'll explain each of these chapterstitles in greater detail, but first, let me elaborate upon thereasons for proper organization of your business plan.
Having a set of "questions to answer" about your businessforces you to take an objective and critical look at your ideas.Putting it all down on paper allows you to change, erase andrefine everything to function in the manner of a smoothly oiledmachine. You'll be able to spot weakness and strengthen thembefore they develop into major problems. Overall, you'll bedeveloping an operating manual for your business--a valuable toolwhich will keep your business on track, and guide you in theprofitable management of your business.
Because it's your idea, and your business, it's very importantthat YOU do the planning. This is YOUR business plan, so YOUdevelop it, and put it all down on paper just the way YOU want itto read. Seek out the advice of other people; talk with, listento, and observe, other people running similar businesses; enlistthe advice of your accountant and attorney--but at the bottomline, don't ever forget it has to be YOUR BUSINESS PLAN!
Remember too, that statistics show the greatest causes ofbusiness failure to be poor management and lack ofplanning--without a plan by which to operate, no one can manage;and without a direction in which to aim its efforts, no businesscan attain any real success.
On the very first page, which is the title page, put down thename of your business-ABC ACTION--with your business addressunderneath. Now, skip a couple of lines, and write it all incapital letters: PRINCIPAL OWNER--followed by your name if you'rethe principal owner. On your finished report, you would want tocenter this information on the page, with the words "principalowner" off-set to the left about five spaces.
Examples: ABC ACTION 1234 SW 5th Ave. Anywhere, USA 00000

PRINCIPAL OWNER: Your Name
That's all you'll have on this page except the page number -1-
Following your title page is the page for your statementpurpose. This should be a simple statement of your primarybusiness function, such as: We are a service business engaged inthe business of selling business success manuals and otherinformation by mail.
The title of the page should be in all capital letters acrossthe top of the page, centered on your final draft--skip a fewlines and write the statement of purpose. This should be direct,clear and short--never more than (2) sentences in length.
Then you should skip a few lines, and from the left hand marginof the paper, write out a sub-heading in all capital letters,such as: EXPLANATION OF PURPOSE.
From, and within this sub-heading you can briefly explain yourstatement of purpose, such as: Our surveys have found mostentrepreneurs to be "sadly" lacking in basic information thatwill enable them to achieve success. This market is estimated atmore than a 100 million persons, with at least half of thesepeople actively "searching" for sources that provide the kind ofinformation they want, and need.
With our business, advertising and publishing experience, it isour goal to capture at least half of this market of informationseekers, with our publication. MONEY MAKING MAGIC! Our marketresearch indicates we can achieve this goal and realize a profitof $1,000,000 per year within the next 5 years...
The above example is generally the way you should write your"explanation of purpose," and in subtle definition, why you needan explanation. Point to remember: Keep it short. Very fewbusiness purpose explanations justify more than a half page long.
Next comes your table of contents page. Don't really worryabout this until you've got the entire plan completed and readyfor final typing. It's a good idea though, to list the subject(chapter titles) as I have, and then check off each one as youcomplete that part of your plan.
By having a list of the points you want to cover, you'll alsobe able to skip around and work on each phase of your businessplan as an idea or the interest in organizing that particularphase, stimulates you. In other words, you won't have to makeyour thinking or your planning conform to the chronological orderof the "chapters" of your business plan--another reason for theloose leaf notebook.
In describing your business, it's best to begin where yourstatement purpose leaves off. Describe your product, theproduction process, who has responsibility for what, and mostimportantly, what makes your product or service unique--whatgives it an edge in your market. You can briefly summarize yourbusiness beginnings, present position and potential for futuresuccess, as well.
Next, describe the buyers you're trying to reach--why they needand want or will buy your product--and the results of any testsor surveys you may have conducted. Once you've defined yourmarket, go on to explain how you intend to reach that market--howyou'll these prospects to your product or service and induce themto buy. You might want to break this chapter down into sectionssuch as..publicity and promotions, advertising plans, directsales force, and dealer/distributor programs. Each section wouldthen be an outline of your plans and policies.
Moving into the next chapter on competition, identify who yourcompetitors are--their weakness and strong points--explain howyou intend to capitalize on those weaknesses and match or betterthe strong points. Talk to as many of your "indirect" competitorsas possible--those operating in different cities and states.
One of the easiest ways of gathering a lot of usefulinformation about your competitors is by developing a series ofsurvey questions and sending these questionnaires out to each ofthem. Later on, you might want to compile the answers to thesequestionnaires into some form of directory or report on this typeof business.
It's also advisable to contact the trade associations andpublications serving your proposed type of business. Forinformation on trade associations and specific tradepublications, visit your public library, and after explainingwhat you want ask for the librarian's help.
The chapter on management should be an elaboration on thepeople operating the business. Those people that actually run thebusiness, their job, titles, duties, responsibilities andbackground resume's. It's important that you "paint" a strongpicture of your top management people because the people comingto work for you or investing in your business, will be "investingin these people" as much as your product ideas. Individualtenacity, mature judgement under fire, and innovativeproblem-solving have "won over" more people than all the AAACredit Ratings and astronomical sales figures put together.
People becoming involved with any new venture want to know thatthe person in charge--the guy running the business knows whathe's doing, will not lose his cool when problems arise, and haswhat it takes to make money for all of them> After showing the"muscle" of this person, go on to outline the other key positionswithin your business; who the persons are you've selected tohandle those jobs and the sources as well as availability of anyhelp you might need.
If you've been in business of any kind scale, the next chapteris a picture of your financial status--a review of your operatingcosts and income from the business to date. Generally, this is alisting of your profit & loss statements for the six months, pluscopies of your business income tax records for each of theprevious three years the business has been an entity.
The chapter on the explanation of your plans for the futuregrowth of your business is just that--an explanation of how youplan to keep your business growing--a detailed guide of whatyou're going to do, and how you're going to increase yourprofits. These plans should show your goals for the coming year,two years, and three years. By breaking your objectives down intoannual milestones, your plan will be accepted as more realisticand be more understandable as a part of your ultimate success.
Following this explanation, you'll need to itemize theprojected cost and income figures of your three year plan. I'lltake a lot of research, an undoubtedly a good deal of erasing,but it's very important that you list these figures based uponthorough investigation. You may have to adjust some of your plansdownward, but once you've got these two chapters on paper, yourwhole business plan will fall into line and begin to make sense.You'll have a precise "map" of where you're headed, how much it'sgoing to cost, when you can expect to start making money, and howmuch.
Now that you know where you're going, how much it's going tocost and how long it's going to be before you begin to recoupyour investment, you're ready to talk about how and where you'regoing to get the money to finance your journey. Unless you'reindependently wealthy, you'll want to use this chapter to listthe possibilities and alternatives. Make a list of friends you can approach, and perhaps induce toput up some money as silent partners. Make a list of those peopleyou might be able to sell as stockholders in your company--inmany cases you can sell up to $300,000 worth of stock on a"private issue" basis without filing papers with the Securitiesand Exchange Commission. Check with a corporate or tax attorneyin your area for more details. Make a list of relatives andfriends that might help you with an outright loan to furnishmoney for the development of your business.
Then search out and make a list of venture capitalorganizations. Visit the Small Business Administration office inyour area--pick up the loan application papers they have--readthem, study them, and even fill them out on a preliminarybasis--and finally, check the costs, determine which businesspublications would be best to advertise in, if you were toadvertise for a partner or investor, and write an ad you'd wantto use if you did decide to advertise for monetary help.
With listing of all the options available to your needs, allthat's left is the arranging of these options in the order youwould want to use them when the time come to ask for money. Whenyou're researching these money sources, you'll save time bynoting the "contact" deal with when you want money, and wheneverpossible, by developing a working relationship with these people.
If your documentation section, you should have a credit reporton yourself. Use the Yellow Pages or check at the creditdepartment in your bank for the nearest credit reporting office.When you get your credit report, look it over and take whateversteps are necessary to eliminate any negative comments. Oncethese have been taken care of, ask for a revised copy of yourreport and include a copy of that in your business plan.
If you own any patents or copyrights, include copies of these.Any licenses to use someone else's patent or copyright shouldalso be included. If you own the distribution, wholesale orexclusive sales rights to a product, include copies of thisdocumentation. You should also include copies of any leases,special agreements or other legal papers that might be pertinentto your business.
In conclusion, write out a brief, overall summary of yourbusiness- when the business was started, the purpose of thebusiness, what makes your business different, how you're going togain a profitable share of the market, and your expected successduring the coming 5 years..
The last page of your business plan is a "courtesy page"listing the names, addresses and phone numbers of personal andbusiness references--persons who have known you closely for thepast five years or longer--and companies or firms you've hadbusiness or credit dealings with during the past five years.
And, that's it--your complete business plan. Before you send itout for formal typing, read it over once a day for a week or tendays. Take care of any changes or corrections, and then have itreviewed by an attorney and then, an accountant. It would also bea good idea to have it reviewed by a business consultant servingthe business community to which your business will be related.After these reviews, and any last-minute changes you want tomake, I'll be ready for formal typing.
Hire a professional typist to type the entire plan on ordinarywhite bond paper. Make sure you proof-read it against theoriginal. Check for any corrections and typographicalerrors--then one more time--read it through for clarity and theperfection you want of it.
Now you're ready to have it printed and published for whateveruse you have planned for it--distribution amongst your partnersor stockholders as the business plan for putting together awinning financial proposal, or as a business operating manual.
Take it to a quality printer in your area, and have threecopies printed. Don't settle for photo-copying..Have it printed!
Photo-copying leaves a slight film on the paper, and willdetract from the overall professionalism of your business plan,when presented to someone you're trying to impress. So, aftergoing to all this work to put together properly, go all the wayand have it duplicated properly.
Next, stop by a stationery store, variety store or even a dimestore, and pick up an ordinary, inexpensive bind-in theme coverfor each copy of your business plan. Have the holes punched inthe pages of your business report to fit these binders and thenslip each copy into a binder of its own.
Now, you can relax, take a break and feel good aboutyourself..You have a complete and detailed business plan withwhich to operate a successful business of your own. A plan youcan use as a basis for any financing proposal you may want tosubmit..And a precise road-map for the attainment of realsuccess...
Congratulations, and my best wishes for the completefulfillment of all your dreams of success!!!