Whether starting your business or building toward a new phase of growth, having a solid business plan guides you. It can also persuade investors and lenders to back you.
But what makes a good business plan? Our experienced team of LivePlan Business Plan Writers have collaborated with business owners and entrepreneurs to put together hundreds of funded business plans for successful startups and existing operations. We asked them for their advice.
1. Once you have a solid overall idea for your business, start working with a business plan writer
“We typically suggest that you start planning as early as you can,” says Stormy Wiseman, Project Manager for LivePlan. Even when you are still tossing around ideas, build them in a system such as LivePlan. That way you can develop your ideas, track them, and refine them until you arrive at a solid concept.
No matter how you get the initial idea for your business, it will continue to evolve. As you learn more about your field, you’ll better understand your opportunities, limitations, and vision. Working with a business plan writer can help you identify potential challenges, prepare for questions lenders will ask, and find the path to getting your business off the ground.
“If you want to engage with a professional writer, it is good to be beyond the napkin phase, which means it is beneficial to have a fairly well-formulated idea for us to work with,” adds Stormy. “When the idea starts to take shape, that is a good time to reach out for professional assistance to polish your plan and make it lender-ready.”
2. Don’t cut corners. Your business plan should be thorough
“A good business plan must include all of the critical sections and information that a reader expects to see in the document,” explains David Campbell, LivePlan business plan writer. “It is thorough.”
The key is this: Your business plan should have the right amount of necessary information, based on your business, industry, and needs for outside backing.
“Missing sections in a business plan would be detrimental to securing funding,” adds David.
A lender or investor needs not only to be able to form a picture of what you want to do. They will also be looking for your blind spots. Cutting corners in the plan could indicate where you might cut corners in your business, or wind up blindsided by something that thorough planning could have accounted for in advance.
3. A business plan has the right amount of data, detail, and context
All that said about thoroughness, your plan doesn’t have to rival, say, Lord of the Rings in length. In fact, depending on the business, you can put together a rock-solid one-page plan in just a few pages.
“A business plan should cover everything it needs to in a way that is not redundant or rambling,” says David.
The right-sized business plan balances thoroughness with engagement. Plus, that focus in the plan demonstrates to any lender or investor that you, too, have focused on what you know the business needs to do.
4. An accessible business plan is easy to follow
“Structure your plan so that it is easy to find information,” says David.
Here’s a tip: A business plan isn’t like a book. The person reading it won’t necessarily start at page one and read straight through to the end.
“A lender or investor will typically skip around a plan to read the information that is the most important to them,” explains David. “Use a business plan template or software that provides all of the needed sections in a logical format. It is also essential to include a table of contents for the reader to find information quickly.”
Your format might vary depending on your plan’s scope, industry, and what you’re trying to accomplish with the plan. Fortunately, your business plan writer can guide that structure so it’s easy for the end reader to follow.
5. Focus on the right things, not irrelevant details
Sometimes we need to take the time to closely examine an issue, with the entrepreneurial equivalent of a microscope. Other times, we need to look down from way on high, taking in everything from the proverbial 30,000-foot view. The trick when crafting a business plan is knowing what perspective and level of detail you need to provide. That can also shift depending on the section.
In David’s experience, clients can be prone to agonizing over details that are important to the business but not necessarily to the business plan. David works to help owners shift their focus to the sections that will matter more to lenders and investors.
“I generally see this with the sections important to funding, like the competitor analysis, competitive advantages, and showing that the management team has adequate experience. These sections tend to get glossed over by clients, though they are essential items to have nailed down to get funding.”
6. Include the right forecast for the right reader
Who you show your plan to can influence the right amount of financial forecasting you’ll need to include.
“When seeking outside financing from a bank,” says David, “you typically want to include a 3-year forecast (which LivePlan can help you put together). If you are approaching private investors, they generally expect a 5-year forecast.”
Overall, says David, the right forecast depends on the goals of the client.
7. Just like your business, your business plan needs to be able to evolve
As we mentioned above, a bank may want one forecast and a private investor another. And you will likely need something more nimble to actually run your business. A good business plan is one that you have the power to change, not an uneditable document that you never look at again.
Overall, don’t think of your business plan as a one-and-done document. Think of it as an evolving road map to your success and vision. When you can update your business plan, you can also quickly adapt it based on what you need to do. For example, you can make a version for a banker, another with a lengthier forecast for a private investor, and even multiple scenarios to navigate your business through uncertainty.
After pitching is done and you are into implementation and operations, your business continues to evolve. Your business plan can evolve right along with it, so it’s always there to guide you and keep you on track toward the fulfillment of your business goals.
Working with a business plan writer is like training for real-world presentations to lenders and investors
A business plan writer can take an idea from an entrepreneur and turn it into a plan that’s ready to go to work. They also know that you need a plan that you can actually use, understand, and update.
When working with a business plan writer like those on LivePlan’s team, you get to prepare for those big meetings with potential backers.
“We are excellent at translating your vision into something that is going to appeal to busy decision-makers,” says Stormy. “We understand the language bankers and investors speak. We can spot problems and bring important aspects of your business plan to light before your important meetings.”
That way, you not only have a professional plan that’s ready to be funded. You can demonstrate that you are ready for the challenges and successes to come.
After all, ultimately, the best part of your business plan is you.