**This is an updated post**
Are you a soon-to-be business owner? Research shows that writing a business plan early on can greatly increase your chances of succeeding during those critical first years.
Of course, if you’re reading this, there’s a good chance that you already understand the importance of writing a business plan and just need some help getting started.
As with any big project, it can help to start with a few basics so you’ll have something to build on as you go along.
So if that's what you're looking for, the following tips from our expert business plan source, an ex Open Colleges trainer and consultant, David Lang will give you a better idea of how to write a business plan, outlining what steps you’ll need to take from gathering the right information to putting it all together.
1. Be realistic
David Lang says it’s important to be clear about the skills, knowledge and experience you have as a business owner.
Answering the following questions can be a good place to start:
- How are your products or services different from what’s already out there?
- How will you set and maintain consistently high standards?
- Would your products or services be considered good value for money?
- How will your business generate income?
- How much income can you expect to generate?
- What expenses will you have?
2. Identify the plan’s purpose
Every business plan should have a clear purpose. It’s important to identify this purpose before you choose your template and start writing, as this will help you focus on the right information and choose the most effective format.
Are you looking to secure financing or clarify your business goals? Or are you hoping to attract executive talent or demonstrate to suppliers that you’re a worthy client?
3. Tailor your business plan to your industry
Because each industry is different and brings different challenges and opportunities with it, you’ll need to tailor your business plan to your specific industry.
“The plan needs to have relevance to your business objectives and suggest information to include that is applicable to how you will operate,” says Lang.
For instance, he says, a restaurateur would be wasting their time if they used a business plan for an IT company, because the two businesses have a completely different focus.
4. Choose a suitable business plan template
Although using a business proposal template can make the process of planning and writing easier, it’s important to find a template that matches your industry and objectives rather than choosing one at random.
Lang also suggests drafting your plan on paper first and then choosing a template that’s simple and easy to format, so you don’t waste time getting the information embedded in the right place.
5. Conduct a SWOT analysis
In order to create a realistic plan, you need to know what opportunities and threats your new business may face, and this is where a SWOT analysis comes in.
It can help you identify your business’ internal strengths, which are the areas it excels in, its internal weaknesses and which are the areas where improvement is needed. You’ll also get a clearer picture of the external opportunities you can take advantage of as well as the external threats you need to be aware of.
6. Look for free sources of information
It’s important to be careful with your money when first starting a business, so Lang suggests looking for free information on sites like Business.gov.au, where you can find everything from business plan templates to information on professional associations and resource centres in your immediate area.
7. Safeguard your professional interests
Although it’s easy to find companies or individuals offering business consultancy services, Lang says it’s important to give careful consideration to what information you’re willing to share with others.
“You wouldn't be the first person to have an idea stolen,” he cautions. “Before you get into sharing too much information on your business, you should consider investing in some solid legal advice and having a confidentiality agreement prepared. This will need to be signed by anyone you’re discussing your business ideas with and will safeguard your professional interests.”
8. Keep it simple
Finally, remember that your business plan will continue to change and evolve as you grow your business. So don’t worry if it’s not perfect, and keep in mind that the simpler it is to understand, the more effective it will be.
“It’s like an elevator pitch – keep it short and sweet so people understand your concept instantly,” says Lang. “If people are confused or unsure what you’re offering, you probably need to refine the concept.”
Interested in setting up your own business? Check out our online business courses to get a head start in this thriving industry.