Do Business Well

Once you get yourself past some of the barriers that seem to be an inherent part of the writing process, you can confront some of the issues particular to the business plan. The overriding point, though, is to keep yourself focused as much as possible on business issues rather than on writing issues. My experience is that the better understanding you have of the business issues, the more easily the writing comes.

While there’s no one right way to write the business plan (or any other material), here are some approaches/techniques I have found to be useful:

1. Determine the priority of issues/success factors for each area of the business. In other words, for each section of the plan—the company, marketing, product/service, sales, and financial sections—list in order of importance the challenges facing your business. Also provide your approaches/solutions for handling the challenges.

For example, for the sales segment, suppose that key issues are whether you can justify an in-house sales force, how you will train it, and how much advertising you can accomplish within the $10,000 advertising budget you have available. List each of these issues and then explain the justifications or solutions for each. This is how your analysis might look:

Pros of in-house sales force. Based on our limited experience, we are confident our salespeople will succeed on one-third of sales calls, making the cost of each sale $600. Manufacturers‘ reps would cost only $400 in commissions for each sale. But our inability to control the manufacturers‘ reps makes us uncertain of their ability to generate the sales volume we want to achieve. Our opinion is that the company’s long-term interests are better served by the greater likelihood of achieving its sales goals with a costlier in-house sales force than with manufacturers‘ reps. But to be

absolutely certain, we are going to experiment with both, using an in-house sales force for some territories and manufacturers‘ reps for others on a trial basis.

Challenges of training in-house sales force. Similarly, the issue here is one of cost versus control. If we hire our own trainers, our costs will be 25% higher than if we subcontract the training to a company that specializes in providing on-site training. But with an outside firm, we won’t have the same control over what’s taught as we would with our own people. Once again, we’ll experiment with each approach to determine what works best for us.

Such written material—your assessment of the situation— then becomes the basis of the actual plan. More detail will likely be needed comparing costs and other resource issues, but the main issues will be on paper. Once they’re on paper, you’re in much better shape than if you’re staring at a blank page.

2. Include as much supporting material as possible. As you set priorities and list the issues confronting your company, make sure you discuss any experiences you’ve had or data you’ve collected that could help in the decision making. It’s easy as you move from issue to issue to neglect important supporting information that could make your business plan stronger.

A business plan I read on behalf of a start-up company illustrates what I mean. A woman planning a company that would make and sell a gourmet food product wrote a plan intended to attract investment funds. It provided statistics on the number of gourmet food stores and on growing demand for her type of product and on plans to provide financial incentives to the food stores and so on.

When I met with the woman, I asked her whether she had actually tried to sell her product to any food stores. As a matter of fact, she explained, she had visited some stores and each had expressed a willingness to place a small but not insignificant order for her product to try it out on food shelves. This fact wasn’t in the business plan, though. She had forgotten about it.

I asked how many stores she had visited. Only three, she replied. But if she had gotten indications of strong interest from every store she visited, she was doing great, I explained. The favorable feedback from potential buyers of her product was extremely important because it came directly from the marketplace. The information and implications belonged in a prominent place in the business plan.

3. Don’t make unsupported statements. This is really a variation on the previous point. Don’t state opinions as facts, especially when you don’t have data to back them up. This is a common problem in many business plans I’ve seen. Entrepreneurs tend to be optimistic and to treat their upbeat expectations as fact. An expectation that the sales force will succeed in one of every three sales calls can easily become an assertion that the sales force succeeds in one-third of its sales calls.

By going through the process of setting priorities and describing issues, the importance of backing up statements becomes apparent. Failing to provide specifics in answer to questions from a banker or investor about how you can be so sure a particular sales or product approach will work so well is a sure way to undermine confidence in your product.

4. Put one company official in charge of assembling/writing the document. Even if several managers have written chapters, one person needs to rework the material to provide a consistent style and eliminate contradictions and repetitions. That person should be able to write clearly and have the confidence of others he or she is working with_; moreover, he or she should be able to handle these responsibilities sensitively and tactfully.

5. Designate an outside reader/editor. After you have worked with a document for a long time period, it becomes nearly impossible to maintain the necessary distance and objectivity to edit effectively. This is especially true for a business plan, which usually evolves over a period of months.

Thus, it is essential that an outsider read through the plan as drafts are completed to find inconsistencies, poor writing, and other problems. As suggested earlier, this person might be an accountant or lawyer or perhaps a business school professor or an individual involved in a communications field like public relations or advertising. The person you choose should have an understanding of business as well as good writing.

You might also want to locate a proofreader to find typos, misspellings, and other minor glitches. They can reflect badly on you and your company.

Possibly related posts: (automatically generated)
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• How Your Business Situation Helps Shape Your Plan
• I Made My Own Advertising Work part 3
• Making a Plan: how to construct a simple and workable business plan part 6
• Are you struggle at the startup, do you know importance of a business plan?
• Evaluate Your Business Resources
• Home-run Service businesses: WRITING SERVICES
• I Made My Own Advertising Work part 1
• Fine Architecture Revealed
• Personally Presenting the Plan

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