The Chamber of Commerce of Metropolitan Montreal

How to draft a good business plan

The time has come for you to draft your company’s business plan. Where do you begin? How do you structure it? Here is a recap of the information you need to include, along with some good advice based on the expertise of InfoEntrepreneurs, business information specialists for SMEs.

At what point in your company’s life cycle should you draft a business plan?

A business is drawn up when starting a company. The document describes your business, its objectives and strategies, the target market, and financial forecasts. It is a sales tool used when seeking funding or applying for a loan. Since it clearly defines the way your company works, it is also an invaluable management tool. Proper use of the document is a key to the success of your young company.

The use of a business plan goes well beyond just the start of a business. It is a constantly evolving tool: as the number of employees grows, when a new product line is developed, when the company begins exporting, etc. It will need to be revised at each stage of your company’s life cycle.

“A business plan is a constantly evolving tool”

Who should write up the business plan?

This task falls to the company’s founder or founders. When starting a company, drawing up a business plan involves a considerable amount of work. But you need to take some time to reflect on it: this is how you will come to understand the connections to be made between the various sections of your business plan and any eventual shortcomings in your business strategy.

There are resources available to help you get through the process. While you will be the one to draft it, in order to completely grasp what needs to be done, there are mentors or organizations like InfoEntrepreneurs that can offer some support—for example, to check that each section of the plan is completed correctly and includes all relevant information. By turning to experts for help, you will be able to get strategic data and assess the accuracy of your revenue forecasts—as they sometimes tend to be overestimated.

What should the business plan include?

The document includes at least ten sections: a summary; the business strategy; the marketing strategy; the operational plan; an analysis of strengths, weaknesses, opportunities, and threats (SWOT); the human resources plan; a social responsibility strategy; an e-business strategy; financial forecasts; and a business exit strategy.

More information on each section:

See the complete guide

Pay special attention to the summary, that is, the description of the business. This is the cornerstone of the document, as it is the first part a financier or investor will read. This section must be clear, concise (maximum of 2 pages), and arouse the reader’s interest. As it is a summary of the main points of your business plan, it should be completed last, once the rest is done.

How do you produce a strong business plan?

Put yourself in the place of the people receiving your document. They get these types of requests every day: what are the elements that will make your business plan stand out from the others?

Form. You are not obliged to use a Word document filled with text and numbers. You can be less conventional—provided that type of approach corresponds to your sector of activity—, for example, by choosing to create a PowerPoint document with supporting images and colours that make it come alive.

Content. Personalize your business plan. Give your reader a sense of your enthusiasm, your motivation, and your confidence in achieving your objectives. If there’s a story to tell, tell it. Is it a family business, resulting from some personal experience? Describe the human aspects of the story, which funding organizations generally appreciate.

Another tip: be careful with the terminology you use. The person reading your business plan may not necessarily be an expert in the field. Acronyms or technical terms may lose the reader’s attention. Think about including a glossary or explaining specific terms.

In both form and content, the business plan must reflect your personality (or that of the company). This is what will make it unique.

Who should the document be shared with?

Internally: it is important for your team to be aware of the goals that must be reached, of the company’s mission and its values. Everyone must be on the same page. That way, when you are unable to make a sales pitch yourself, you can be confident that anyone around you can step in to take your place. It is good practice to include the business plan in the training process for all new employees.

Externally: it should be shared with financiers and investors, of course.

The time you spend drawing up your business plan is a valuable investment in your company’s future. Why? Because beyond creating a sales tool, the process of drafting the document is also an exercise in transforming your ideas and capital into a profitable enterprise, and thereby identifying its strengths and weaknesses early in the game[1].

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[1]http://canadabusiness.ca/business-planning/why-do-you-need-a-business-plan/

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