The Secrets to Writing a Successful Business Plan summary

Before we get to the real meat of writing a business plan, it helps to go over potentially deal-breaking mistakes and learn how to avoid them, specifically when it comes to seeking funding.

First of all, precision is everything, especially when identifying your competition. That means you need to be accurate and state exactly what you intend to do. So, while it’s nice to share your dreams with people, your business plan should deal with concrete issues like financing, product development, distribution and branding among others.

OK, now that you know about common pitfalls, let’s have a look at strategies for writing a strong business plan. The first thing to do is to put together a feasibility plan, a tool for challenging your assumptions.

This document, about five pages in total, should cover the key elements of your plan: the business idea, your main advantage over competitors, a profile of your target customer and a few snippets about daily operations. You should also include some figures that approximate your potential cash flows.

We all know not to judge a book by its cover, but when it comes to business plans, the opening section can make or break the deal: it’s called the executive summary and it’s absolutely essential.

That’s because this section might be the only one your readers even look at. After all, bankers and investors are busy people, often mired in piles of business plans. Since they’ve got limited time to review them all, it’s unlikely that they’ll get past the first two pages of your plan if the story you tell doesn’t grab their attention.

You might have been working on a project for years and take things about it for granted, but it’s all new to those reading your business plan, which means you’ll need to present your ideas clearly.

For starters, you should detail your product or service, the channels through which it will be distributed and any competitors. When it comes to the product, naturally your readers will want you to paint a clear image of how it works. If you invented a new type of electric engine, investors would want to see the technical details of the device.

Once you’ve got this information laid out you’ll need to communicate your business strategy and your plan for reaching your goal. To do so you should break it down into three parts.

First, include a market analysis that details the size of your market and potential customers or business clients. By beginning this analysis with the size of the market, you’ll show that there are enough customers to make your idea profitable.

There’s another aspect of your business plan that’s absolutely essential to investors and that’s the financial statements. Most of us don’t know much about this, so it’s helpful to start with the basics.

Financial statements are basically charts that detail key financial figures regarding your business activity, and drafting them is the last step before you tackle the executive summary. In fact, these tables are a kind of summary that uses numbers to wrap up everything you’ve previously described.

Congratulations, you’ve got everything you need to craft a stellar business plan! But now it’s time to talk about investors. Because knowing how to approach them is essential to your plan’s success.

First off, if you are going to apply for a bank loan, don’t go in assuming they’ll fully fund your business. In fact, bankers tend not to consider themselves the sole source of funding. That means you can’t expect to get more than 80 percent of your funding from a bank and, before you even apply for a bank loan, you should have secured some other funding. Not just that, but a bank will also want you to commit your own money, bringing in collateral of about 125 percent of the loan.