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Tips For Writing An Effective Business Plan

tips-for-writing-an-effective-business-plan-300x199 Coworking Space San DiegoIf you’re an entrepreneur in the San Diego area starting your new business, one of the things that you should take the time to do is draft a business plan and find the right office space. According to the U.S. Small Business Administration, “a good business plan guides you through each stage of starting and managing your business. You’ll use your business plan as a roadmap for how to structure, run, and grow your new business.”

Unfortunately, many San Diego entrepreneurs are unaware of how to draft an effective business plan. Below, we’ve provided some tips on how to do so.

Know What To Include

Before getting started, you should have an idea of what you’re going to include in your business plan. Sections that you’ll likely want to include are:

1. Executive Summary
A. Opportunity
– Problem Summary
– Solution Summary
– Market Summary
– Competition
– Overview
– Why Us?
B. Expectations
– Forecast
– Financial Highlights by Year [chart]
– Financing Needed

2. Opportunity
A. Problem & Solution
– Problem Worth Solving
– Our Solution
B. Target Market
C. Competition
– Current Alternatives
– Our Advantages

3. Execution
A. Marketing & Sales
– Marketing Plan
– Sales Plan
B. Operations
– Locations & Facilities
– Technology
– Equipment & Tools
C. Milestones & Metrics
– Milestones Table
– Key Metrics

4. Company
A. Overview
B. Team
– Management Team
– Advisors

5. Financial Plan
A. Forecast
– Key Assumptions
– Revenue by Month [chart]
– Expenses by Month [chart]
– Net Profit (or Loss) by Year [chart]
B. Financing
– Use of Funds
– Sources of Funds
C. Statements
– Projected Profit & Loss
– Projected Balance Sheet
– Projected Cash Flow Statement

6. Appendix
A. Monthly Financial Forecasts
B. Additional Documentation

Research Thoroughly

When drafting a business plan, you’ll want to make sure that you conduct thorough research. William Pirraglia, a former management executive, wrote, “Consider spending twice as much time researching, evaluating and thinking as you spend actually writing the business plan. To write the perfect plan, you must know your company, your product, your competition, and the market intimately.”

Draft A Company Profile

One of the most critical sections of the business plan is the Company Description. In this section, you’ll include things such as the history or your organization and the culture you wish to implement. Include items such as where your San Diego office space will be and whether you plan to use flexible office space.

Defining things such as your office space expectations is not only useful for identifying culture, but it’s valid for outlining expectations to your employees as well.

Keep It Concise

Although your business plan is useful for creating a roadmap to your success, you shouldn’t make it too terribly long, either. No one is going to take the time to read through a hundred-page document. Try to keep your business plan around 30 pages or so. You want it to be useful and informative, but you don’t want it to be boring either.

Make Sure The Business Plan Is Fluid

Lastly, when developing a business plan, you’ll want to make sure that it is fluid. Just as your business changes, so too will your business plan. Don’t be afraid to check back into your business plan to tweak and refine it over time. This is another reason why you don’t want your business plan to be too long. If it’s too long, you’ll find it difficult to revise.