How To Develop a Business Plan

Five Key Decisions to Make

Developing a business plan is not simply a writing process. It is foremost a critical thinking and planning process which uses the strategic capacity of your mind to look ahead and choose a course of action based on the best (although limited) information you have. These are five questions whose answers have significant impacts on how you develop your business plan and the content within it.

  1. What Planning Help Will I Need? If it is clear to you that you don't know the first thing about research, this may be an area to seek help. If you feel the quality of your professional writing won't be up to snuff, hiring a business plan writer may be important. Alternately, if you have no idea how to create financial statements and projections, this may be where you need the help. If you need help in a number of areas, seeking a business plan consultant may be the best course of action.
  2. What Industry Am I In? Being clear about what industry you will compete in may be a simple choice for your business. A dry cleaning business is in the dry cleaning industry and a restaurant is in the restaurant industry. However, Chuck E. Cheese's is also in the entertainment industry, and Nintendo joined the fitness industry with their Wii Fit product. Industry is based more on the competitors and substitutes for your products or services than the tradition you start from.
  3. What Customer Segments Should I Target? Choosing the specific customer segments to target informs your entire marketing strategy. By selecting a specific customer niche or niches, you have made it much simpler to select how to find, sell to and retain those customers.
  4. What Type of Funding Should I Seek? The size of the capital investment you seek, the potential returns you can offer, and the exit strategy for your firm all determine the type of funder you can reasonably seek. By deciding who this is up front (angel investors, private equity, banks, corporations, etc.) you will have a better understanding of how to tailor your plan.
  5. What Management Help Will I Need? You should think deeply about where your shortcomings as a manager will be and understand that even small businesses sometimes require management skills which are too diverse for one person to handle. Look for holes in your own skill based on the functions your operations must fulfill and then look for partners or employees to fill those roles.


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