Writing the Business Plan
The business plan can’t just be a collection of flowery prose. It has to verbally paint a picture of how the product or service is purchased and used by the customer. If the reader cannot get a mental picture of the product or service in use it will be difficult for them to see the benefits it has. People buy products or use services because they get a benefit from its consumption. Benefits vary depending on how the product or service is used. Most people purchase goods or services because it makes their life easier, more convenient or enjoyable, reduces risk, or provides profit potential. Every buyer asks “what’s in it for me – how will my life will be made better?”
The business plan must contain sufficient detail so that the reader recognizes that there is an actual plan rather than just hollow words. For example; a plan could say something like “we will utilize radio, television and print advertising”. That may not be an untrue statement, but it lacks specifics and definition. More detail of what kind and how much of each will be needed to give the reader more confidence that the entrepreneur really has thought this detail through. It also has to mesh well with the financial projections. Increased sales typically result from increases in adverting and promotion as well as additional sales staff and distribution. The business plan should address the future ramification of the decisions made.
The hardest part of any set of financial projections is to accurately estimate sales revenue. After all you don’t really know how many people with buy your products, seek out your services, or eat at your restaurant until it actually happens. The business plan, especially the marketing section, must give the reader confidence in the projections. In fact, there is good reason to consider writing the business plan after you have completed the financial projections. Your sales and production estimates may give you some clarity as to how you should structure the business operations.