First Tips To Writing a Business Plan

Entrepreneurs are often advised to write a business plan before they officially start their business. The act of writing the business plan will help focus on the details, find items that were not previously considered and fine-tune the approach to running a successful business.

Before a formal plan can be written, however, there are a few key elements you’ll need to work out that will ultimately help you craft that document. Entrepreneurs and business experts recommend taking the following steps before you sit down to write your plan.

Determine your purpose
The primary purpose of a business plan is to show investors, lenders and other potential stakeholders how your company plans to make a profit. Profit is important, but it’s far from the only thing that matters when you start a business, experts say.

“Business plans can be helpful tools to clarify … business activities, [but] they … encourage entrepreneurs to focus on what they are going to do,” said Alan Williams, co-author of “The 31 Practices” (LID Publishing Inc., 2014). “This overlooks two more important questions: ‘why’ — why it exists and why employees would want to get out of bed in the morning, and ‘how’ — the values of the business, what it stands for, how people representing the business will behave.”

Williams noted that entrepreneurs should take time to identify and articulate their business’s core values and purpose, which will serve as your organization’s compass for decision making at all levels. Williams’ co-author, Alison Whybrow, said that this “compass” can be discovered by having an honest, open conversation with your team.

“One thing that a team might want to do is engage in a formal assessment process — looking at habits, beliefs, values and capability — so that they are working from a clear starting point and have a framework for discussion about working styles, strengths, and individual and collective blind spots,” Whybrow said.