Learn How to Write a Solid Investor Business Plan

Creating a solid business plan takes time and energy. You may be asking: "Why do I need a business plan?" or "Why go to the trouble of documenting a business idea that I know will work?" The answer is that you significantly increase your chance of success if you chart your course with a written business plan.

A well-written business plan can provide two distinct benefits.

First, it can serve as the vehicle to convince potential investors or lenders to provide the financial backing needed to start your business.
Second, it can serve as an important management tool, providing a blueprint and step-by-step instructions for transforming your ideas into a profitable business, providing goods and/or services to the selected market.
Remember that no two business plans will look alike.

There are a number of key considerations that will play an important role in shaping the content. These considerations include whether you're writing the first plan for a new business or business opportunity, or writing a plan that updates or supersedes an already existing plan. Your business's current status will have a significant impact on the type of planning that's needed. An ongoing business might require a plan that relates primarily to a new market that it wants to enter, or a new product that it wants to introduce.

Our discussion of the value of a business plan addresses the issue from two angles: the benefits of a plan and the events that make it appropriate to create a plan.

Know the Benefits of a Written Business Plan

Everyone who opens his or her own business has a plan, however informal. The camera store clerk who decides to open a photography studio may not have a formal, written plan outlining the steps to be taken. Hopefully, however, at some level she has organized the relevant information, performed her own analysis of the market, and decided that she can make a living by starting out on her own. Perhaps she has been moonlighting by photographing weddings and other special occasions and the demand for her professional services seems sufficient to support her without the camera store job.

What steps did she take to reach that decision? Hopefully, at a minimum, she sat down and tried to compile a list of what it would mean to leave a salaried position and take on a free-lance career. At the top of the list would be a comparison of the net income from free-lancing to the net salary at the camera store. That would involve estimating the number of jobs she could reasonably expect, the cost to provide the required services, and the prices she could charge. The irregular timing of payments versus a steady income might present personal cash flow problems. The availability and cost of benefits would also rank high, as would all the intangible factors that differentiate self-employment from employee status.

However, even if our hypothetical camera store clerk has a well-thought out plan entirely in her head, at some point she will need to communicate it to others, such as suppliers, professional advisors, and perhaps a banker from whom she wants to obtain a line of credit.

Having a written plan is an essential communication tool, since it's not practical to explain your operations in person each time someone needs to know who you are. Moreover, the odds are that our budding entrepreneur has not thought out every significant aspect of her future business. Going through the process of creating a written plan can help ensure she hasn't missed any significant factors that can cause her fledgling business to fail.

When Should You Create a Written Business Plan

If you're just starting out in business, a written business plan can help you organize all the pieces that will have to come together to make your business a success. A business hoping to expand its operations in some way can achieve the same benefits. A well-established business trying to grow out of a business-as-usual rut can use a plan as a modeling tool to examine various options before committing to one.

Many small business owners feel that they can keep track of everything without the need to write it down. A written plan, after all, is really just the embodiment of the internal planning that every business owner does anyway. However, the structure of a written plan provides makes it more likely that you will consider all relevant factors and that nothing important slips through the cracks.

What justifies the additional time and energy you'll spend creating a written plan that presents a blueprint of your business idea? An increased chance for success. More specifically, a plan can be

A reality check when you first examine the feasibility of your business idea, which forces you to consider all relevant factors.
Your business's resume, which will be vital in dealing with lenders and outside investors, and an important tool in negotiating with vendors and attracting employees.
A timetable for operations, helping you to coordinate all the diverse activities that go into running your own business.
A modeling tool that helps you evaluate the variable factors that affect your business, so you can better prepare to deal with situations that may arise as conditions change.
A vehicle for tracking the progress of your business.
A blueprint against which you can adjust operations in order to achieve your goals.
A starting point for future planning.


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Club Sponsorship Opportunities:

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Join or login to comment.

  • Joe V.

    Mark, This type of reaction is one of the reasons we keep moving forward...and keep trying to do more. From all of us, Mark, thank-you.

    January 17, 2014

  • mark n.

    As always another great meeting.Tons of good information and very informative.Thanks to Brian,Joe and Terry three of the nicest and most helpful people I have come across.They always seem genuinely concerned about your success and what they can do to help you achieve your goals.

    January 17, 2014

  • Jason H.

    Great materials, motivation and instruction on helping us get moving!

    January 15, 2014

  • Kathryn L.

    We members are so fortunate to have the forward looking team at the top, Brian, Terry, Joe, having the mindset to consider the goals of experienced investors as well as the newbies and all of us in between. Thank you Thank you

    January 15, 2014

  • Brian B.

    A great Kick-off to what will be a GREAT year for both our Investor/ Members, and for the group itself. This was a valuable, interactive, and fun session, where everyone had the opportunity to share their 2014 Goals, and take the first steps towards building a solid Business Plan to achieve those goals. We had a great mix of experienced and new investors, and we welcomed FIVE new members, who attended one of our events for the first time. We also got great feedback on our NEW 2014 format, where each month is themed, and at the end of the month, those members who attend our 'Hands-on" Workshop, will exit the month armed with a Powerful Action Plan designed to help you take big steps towards achieving your goals.

    January 15, 2014

  • Joe V.

    Great start to a new year.

    1 · January 15, 2014

  • Jitendra "Jay" M.

    Happy New Year to my friends.

    1 · January 14, 2014

  • Brian B.

    You wouldn't build a home without a Blueprint, and you should't embark on a Real Estate Investment Career without a Business Plan. Come to this session to learn what elements are essential to a business plan, and what lenders look for in a business plan. A great way to kick off your new year. See you there!

    January 10, 2014

  • Sue P.

    Unfortunately I am not able to attend tomorrow but am a firm believer in plans and goals. Last year my goal was to purchase 3 homes to renovate as I was just getting started and learning. Everytime I was asked about my business I would repeat "and my goal is 3 homes in 2013..." Well a bit to my own surprise I made it, I bought 2 and had a third under contract closing soon. So thanks for the 2014 Business planning handout and for all your encouragement.

    January 6, 2014

  • Brian B.

    From the desk of Captain Obvious: We will keep a close eye on the weather, and decide whether or not to cancel this MeetUp sometime tomorrow. In the meantime, today would be a great opportunity for you to decide on your goals for 2014, as we will be discussing these at this meeting. There are LOTS and LOTS of evolving trainings, interactives, programs and JV opportunities coming this year, and we're excited to start sharing them with you.
    To be continued . . .

    January 6, 2014

  • Thom o.

    I am super excited to meet others interested in r/e and learning as much as I can.

    December 25, 2013

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