Five Tips to Writing a Successful Business Plan
by Retta Parsons | May 31, 2023
The thought of writing a business plan, for some people, can be burdensome at best and intimidating at worst. However, writing one does not need to be overwhelming. Constructing a business plan gives an owner the opportunity to consider, and record, items essential for the optimal function of their business. For example, carefully considering and writing the mission and vision statements can reveal what the business does (and does not do) and why it is doing it.
Building a Strong Business Plan
A business plan does not need to be long, rather, it should succinctly address the organization’s products/services and processes and how it will address customers’ needs. This article provides suggestions and examples to help build a strong business plan to gain positive outcomes.
- It’s About the Business—Not You: Try to keep in mind your reader. Who will be looking at your plan and, possibly, making decisions that will affect your business? Generally, loan officers, primary contractors, potential investors, etc. are interested in your business and its capacity to deliver products/services that will address customer needs. As such, their focus is on your business—not you. Avoid using words such as “I, me, our, we.” Rather, take a “third person” approach and use such phrases as, “the business,” “(name of your business),” or “the owner (use sparingly!).” Consider the following two examples:
Bad Example: My mission is to make customized hats that you will want to wear. My vision is to provide you with a hat where I have shopped for good quality materials. I will also create an office atmosphere where my employees will want to be at my company to do their work.
Recommended Example: The mission of Topper Hats, LLC, it to create quality, customized hats that exceed customer expectations. To achieve this, the vision is to carefully listen to customer requirements and create hats to address those needs. Further, Topper Hats, LLC, will create an office environment where staff will be safe, valued, and productive. - Brevity is Your Best Friend: If you can say something in five words, rather than 10, do it! Microsoft Word is good at providing suggestions for brevity. Pay close attention to the brightly colored underlines and right click on them. Many times, the suggestions can lead to a better, briefer document. Start with a brief outline of key points when starting each section. The general rule is that there should be no more than three key points. Then, take each point in isolation and fill in a paragraph remembering to include supporting details. Do not worry about proper grammar and punctuation at this point. Your goal at this point is to get your thoughts on paper. Proper grammar and punctuation are done during proofreading. Always remember, “Great writing is done during the edit.”
- Love Them or Not, the Numbers Need to be There: Writing paragraphs about financial aspects is great, but projected financial statements are also essential. Frequently, business plans will contain written paragraphs that explain in detail each item that is needed for start-up or monthly expenses and sometimes, but not always, include the cost. However, after a half page or so of this, things become a blur. “Financial narratives” are important, however, use them to provide brief additional information to support the projected income statement, cash flow statement, and balance sheet. Consider the following projected monthly income statement example with its financial narrative below:
Example of Income Statement for a Beauty Business
- Write the Executive Summary Last: How do you know what you are summarizing if it doesn’t yet exist? Make sure to recap the message—emphasizing positive points and, especially, what makes your business unique.
- When Finished, Proofread Your Business Plan Backward: When it is time to proofread your plan, read it backwards. In other words, start with the last section on the last page and move forward from there. Frequently, in our rush to complete the proofreading, we see what we meant to say, rather than what is printed on the page. A strategy to avoid that is to read a document out of order by starting at the end and working to the front. After you have proofread the document in reverse, have a few other trusted business professionals review the plan and offer feedback. They may provide suggestions that you didn’t even consider.
As you write your plan, keep these five items in mind. Write in third person, be brief, include financial statements, write the executive summary last, and proofread and edit thoroughly. By doing so, your intended audience will be able to absorb the information, which will place you in a better position to succeed.
Retta Parsons
Consultants, Hillsborough, ParsonsFlorida SBDC at Hillsborough County
Specialty: Start-up, Bookkeeping
Retta Parsons brings a wealth of knowledge and experience in business management and public administration to her role as a business consultant. She previously served as CEO of Shiawassee United Way. In that position, she provided leadership to ensure the construction of a $26 million county medical care facility. She also led the change process and alliance establishment that resulted in the implementation of United Way 2-1-1 in Shiawassee County. Parsons also served as a training director for Girl Scouts, where each year she managed the delivery of approximately 124 trainings for more than 700 attendees. Parsons enjoys being active in the community. Past roles include chairperson for the State of Michigan, Department of Health & Human Services, Shiawassee County, board; chairperson of the Shiawassee Human Services Council; and ambassador for the Shiawassee Regional Chamber of Commerce. She earned a Master of Public Administration degree from Western Michigan University and a Bachelor of Arts degree in Human Resources Management from Spring Arbor College. She is a certified Child Care Facility Inspector, Instructor of Trainers, and Bridges Out of Poverty Trainer. In her spare time, Parsons enjoys bike riding with her husband, Roger, and spoiling her children and granddaughter.