Writing a Business Plan

 Everyone new business needs to start with a good businesses plan.  A business plan outlines the who, what, where, how, why, and when to a new business.  Such a plan serves two purposes:  it is an exercise that forces the person or people starting the business to think through all the critical aspects of their venture; and it can be used to obtain financing or participation by partners.

 A good business plan will include information on the company product or service, the background of the people who are starting the company, the potential marketplace for the business, and a marketing plan.  The plan should also include a well-thought budget for the start-up phase of the business and a year or two thereafter.

 Business plans are often presented to investors, financing companies or banks, and business partners to convince then of the viability of the business.  For this reason, business plans should be well written and persuasive, conveying the vision and potential for the new business to those who read it.  They should also be well researched and organized to reflect the professionalism of the organization.

 Some people hire professionals to write their business plans, others write them themselves.  It’s important that an entrepreneur honestly assess his or her own ability to pull together an effective business plan.  If you were starting your business, how would you begin to write your business plan?  Would you hire someone else, write it yourself, or use business plan writing software to help you out?

Overview

Students explore sites that give advice about writing a business plan and provide checklists for what to include.  They also find information on how to improve their own writing and plan a business budget.  They will also use books to research writing business plans.  Students will then write the business description section of a business plan; this section provides a description of the product or service, the typical consumer that the business will target, and the general structure of the business.

Students will work in groups of two to role-play a banker and a start-up owner.  The business owner must persuade the banker to give the loan and the banker must ask the business owner to explain the risks of the business and how certain he or she is that the loan will repaid.

Objectives

• Research how to create a good business plan.
• Learn about good business writing styles.
• Locate books about business plan writing.

Directions

1. Give students a description of what a typical business plan contains.  Ask them to consider an online business, such as Pets.com, and brainstorm as a group to create a description of the business.  Discuss other parts of a business loan, such as a marketing plan, information about key personnel in the company, and financials.  Ask students what information might be included in each of these areas.  Now have student’s research advice and information about business plan writing, and have them write a description of an Internet business of their choice including a description of the product or service, the typical consumer that the business will target, and the general structure of the business.

2. Students should work in groups of three to agree upon a business idea, research how to write a business plan, and write a description of the business.

3.  Students should use the following questions to help guide them in their research:

• What information should be included in a business plan?
• What additional information should you include in a business plan for an online business that wouldn’t be necessary for a regular business?
• What resources could you use to help you estimate costs of doing business?

Also look at information on topics like the following:

• What criteria would you use to choose business plan software?
• What tools can you find that help you check your writing for spelling and grammar errors?

Consider whether you have the writing skills to write your own business plan or whether you should hire a professional to write it for you.  How much would it cost to hire someone to write it for you, and why might it be worth the cost?

• What information should you include when writing about the background of the people starting the company?
• Which book do you think would be most helpful to you in writing your business plan; why?
• What would a marketing plan include?
• What are some common grammar problems you should avoid?
• What information would somebody who is going to lend you money want to have about your business?

 

      The following questions may help students prepare to answer questions about their business plan:

• How will the business pay back money it has borrowed?

Think about how long it would take a business to start making money; how would you survive during that time?

• Where will your salary come from in the first year?
• How will you market your new business and what costs are associated with that effort?
• Will people be willing to pay the price you are going to charge for your product or service?  Why or why not?

4. After students complete their research, have them write their business description together.  If they wish one person can do the research, another can write the plan, and a third can read their business description for the class.  Each group of students should then participate in a 5-minute question-and-answer session with the class about their business.  Suggest that any questions for which they don’t have answers would be good topics for further research if they were creating an actual business plan.

After students have participated in a question and answer session ask what questions came up that they hadn’t considered before.  What questions were asked that they should consider covering in their business plan?  What questions might a banker have about your business when you apply for a business loan?  Have students list resources (lawyers, accountants, etc) who would help them with sections of their business plan.  How important is it that somebody starting a new business has experience in that type of business already?

Additional Web Sites

Online Technical Writing, Austin Community College www.io.com/~hcexres/tcm1603/acchtml/gravmov.html this is part of the Online Technical Writing Course Guide from Austin Community College.  Sections on common writing problems in spelling, grammar, and usage are included.  There is also a useful list of writing reference books and style guides.

Entrepreneur.com www.entrepreneur.com this site is devoted to new businesses and includes information on writing business plans, marketing, and finance.  Their Business Plan Expert in the Starting a Business channel of this site contains common questions and answers about writing a business plan; you can even submit your own question and get their advice.

Vernon "BDB" King
Virginia Beach Technical Center
Virginia Beach Virginia