How to Write a Good Business Plan

A good business plan can help guide you through the various stages of your business. It can be your ticket to gaining your next investor or business partner. You can avoid financial pitfalls if you follow your business plan, as long as it's based on solid and thorough planning. Here's how to write one:

Conduct a SWOT Analysis

Before you can write a good business plan, you have to do a SWOT analysis of your business. SWOT stands for strengths, weaknesses, opportunities and threats, and these are all things that every business faces. For example, a SWOT analysis for a business owner who wants to launch a goat's milk ice cream business may have a SWOT that looks like this:

• Strengths: Goat's milk has a unique flavor
• Weaknesses: Hard to change some people's minds about switching from cow's milk to goat's milk products
• Opportunities: No one else in this market has a goat dairy business 
• Threats: Licensing requirements and other regulations to be able to sell dairy to the public

A SWOT analysis is a good starting point to help you complete the elements of a business plan.

Incorporate Essential Elements

You should include the following essential elements in your business plan, and preferably in this order:

• Executive summary
• Business description
• Management and other team members
• Market and sales analysis
• Product or service description and information
• Financial objectives and requirements

Adding an appendix may be appropriate, and a table of contents will make it easier for you and other readers to navigate your business plan.

Do Your Research

When you're writing a good business plan, it's important to do your research. Don't base your plan on your assumptions or guesswork. You will need to know the trends, historical data and other industry information yourself. Begin by researching reports and reputable trade organizations in your industry. There are also government websites with statistical data, such as the United States Bureau of Labor and Statistics website.

Keep it Short

A lengthy business plan doesn't make it a good one. You can write one in less than 15 pages that can capture the essence of your business and serve your purposes. You can write a longer one, but try not to exceed 30 pages. You'll lose your readers, and they will most likely browse and not read the entire plan. Whatever the length is, your executive summary needs to be catchy enough to capture the interest and imagination of your readers. If it doesn't do that, then few people will be motivated enough to keep reading your plan.

The trick to writing a good business plan is to take your time. Don't rush through it, but at the same time set a deadline for completion. You can always change your plan as the facts or your circumstances change.