How to Prepare a Business Plan explains how to make your business plan the best it can be to impress investors. It provides you with insight into the world of entrepreneurship and practical advice for making your business plan stand out from the crowd.
You may be wondering if you should read the book. This book summary will tell you what important lessons you can learn from this book so you can decide if it is worth your time.
At the end of this book summary, I’ll also tell you the best way to get rich by reading and writing.
Without further ado, let’s get started.
How to Prepare a Business Plan Book Summary
Lesson 1: It is imperative that retailers provide detailed answers to a number of questions in their business plans.
Owning a modest business on Main Street is the stuff of many enthusiasts’ dreams. However, getting started in the retail sector can be a nightmare. Small businesses have a hard time competing with large corporations because they can offer low prices. Why is this a priority for you? To get a loan from a bank and start a retail business, you need a solid business plan.
It’s not all bad news for aspiring store owners. The reader of your business plan will likely provide useful insights into your venture.
Banking executives probably will not understand production proposals full of technical or scientific jargon, but they do understand the language of commerce. Your plan is so simple that you do not need to spend much time explaining it.
The less explanation you give, the more room there is for a discussion of the market, which is, of course, crucial.
Be as transparent as you can about market conditions when you are launching your product. You need to prove to a potential bank that there is a significant customer base in the area where your business is located. The size of the market share you can realistically claim is also critical to your bottom line.
You also need to know how many people will pass by your store each day, what percentage of them will enter it, and how much money each customer will have to spend to make a profit.
Once the answers to these questions are determined, you need to lay out your purchasing policies in your business plan. By this I mean the process by which you decide what stock to buy, how much to buy, and when to sell.
It cannot be stressed enough how important it is to include this policy in your strategy, because financial institutions know all too well that retail businesses suffer losses from ill-advised purchases. It is important that you determine how you will make your decisions and how you will keep your inventory in stock.
Potential lenders will want to know how often you will perform tasks such as physically counting inventory.
Lesson 2: A strategy for growing your company’s online presence is essential.
It’s hard for young people today to imagine life before the Internet, which has only been around for less than 30 years. Businesses are still figuring out how to make the most of this technology, as it is still in its infancy.
There are hundreds of online businesses that have made fatal mistakes for every Facebook or Amazon that has become indispensable. So you need to know how to avoid the hidden pitfalls of the Internet and show the readers of your business plan that you know your stuff.
As a first step, you should research what mistakes are most commonly made by companies doing business online.
For example, some startups pay for a website design before they have thought about the site’s purpose. Another common mistake is buying a website built with proprietary technology that belongs only to the designer.
Therefore, only the designer can make changes to the site. This leads to higher costs and longer wait times when we need to make changes to the site. The fear of such obvious mistakes causes many companies to postpone their online presence.
Customers who have read your business plan should visit your business website if you can avoid these mistakes.
For example, they might be interested in knowing the total number of monthly visitors and the percentage of returning customers to your website. For example, you might be curious about your website’s referral sources. Where are they coming from, and what are they doing? How do visitors find your website? Do they use social media, search engines, or links from other websites?
Include some data about what visitors do on your site after they get there if you want to learn more about them. It’s critical to know how many visitors leave the site immediately. In other words, bounce rate measures how many visitors visit a website and then leave immediately.
As part of your strategy, also think about conversion rate. The term “conversion rate” refers to the ratio of website visitors who make a purchase to the total number of website visitors.
While it may seem overwhelming to gather all this information, you can get many of these statistics and rates using the web analytics tools already installed on your website.
Lesson 3: Take the time to organise your loan in advance.
Some entrepreneurs may refuse to borrow money. They prefer to grow their business independently and reinvest their profits over time. This path may be too slow for some. The second group prefers rapid expansion, which requires additional borrowing.
Carefully consider your borrowing options before making hasty decisions when expanding your business.
Knowing the right type of borrowing for your business can help you avoid unnecessary financial missteps.
At the beginning of your plumbing business, you may need to take out a loan to buy the equipment you need. Since your customers will pay you as soon as each project is completed and in cash, you will not have to dwell on this amount for long. After a few months, you should have a positive balance in your checking account and not need to take out any more loans.
Since interest on a long-term loan must be paid regardless of whether the business is in debt or not, it would be unwise to take out such a loan to start a plumbing business. Therefore, it is advisable to set up an overdraft account in case of a financial emergency. As soon as you start earning income again, you can repay this overdraft.
The need for a loan is often the trigger for opening a new business, which is often the case when the finances of the business first become complex.
It may be worth investing in a large staff and expensive production equipment if you want to start a manufacturing business. If you start doing business right away, you’ll probably get a lot of orders, but you will not be paid for your employees’ work for some time. In the meantime, you will have to produce the goods and pay the workers for their work.
Before you receive payments for goods or services, a business needs “working capital.” When you receive your working capital, you should negotiate a longer holiday period with the bank. This will give you some breathing space before you need to start repaying loans to allow for collections from customers.
Lesson 4: A clear, concise and data-driven business plan is essential.
You’ve decided what data to include in your business plan, but how will you organize that data? Your writing style should reflect your audience and purpose. If you write it correctly, your reader will want to give you credit. However, if you make mistakes, your audience will get bored and you won’t be able to raise as much money.
When writing your business plan, you should keep certain stylistic aspects in mind to ensure that it’s effective.
The first step is to express your ideas as clearly and simply as possible. Remember that your reader may need to do several things at once while reading your plan. Avoid unnecessary adverbs and adjectives, and don’t condense too many ideas into one line. A long, convoluted sentence is likely to lose the reader’s attention.
In addition, summarize as much information as possible in your business plan. Your potential investor will be put off by too much information in your business plan. Consider how much money you’re applying for before deciding how much to write. If your loan application is only $300, the bank manager probably won’t want to read a novelistic explanation of why you need the money.
A loan application over $50,000 will pique the interest of potential investors who want to learn more about your business plan and its potential for success. For example, if you need a large loan to start a retail business, your business plan should include extensive market research.
Finally, be honest about every aspect of your business plan. At this early stage, it may seem like a good idea to make exaggerated claims, but this strategy will backfire. Don’t make blanket statements; instead, write down accurate numbers.
Don’t boast that your product is the cheapest on the market, but evaluate how it compares to the competition. Your audience is likely to be very numbers-savvy people who prefer concrete numbers to flowery prose.
If you want to be successful with your ideas, they need to make sense and be practical. Fortunately, you can’t put your ideas to the test without first putting them on paper. Think of writing a business plan as the first chapter of your success story.
How to Prepare a Business Plan Review
How to Prepare a Business Plan is a great book I’d like to recommend to anyone who is interested in business. If you spend some time digesting the ideas, it might make a positive impact on your life.
A good business plan is the key to funding your new project. To secure your readers’ investment, you need to show that you understand the challenges of your industry and address specific issues such as the market for your goods, your cash flow forecast, and your online presence. Finally, be clear and concise by highlighting numbers and avoiding generalizations.
A business expansion strategy is essential.
Your business plan still needs to cover the same points, whether you’re seeking funding for a brand new business or to grow an existing one.
However, two of these issues require your undivided attention. For example, if you’re writing about your target audience, you need to demonstrate that there’s room in the market for what you’ve to offer.
Second, suppose you’re writing about your methods. In that case, you must show that you’ve considered that a larger company may require a different management structure and that you’ve plans to hire additional managers if necessary.
About the Author
Before becoming a writer, Edward Blackwell worked as a business consultant specializing in small businesses. In addition to being an accountant and a business owner, he has written several books on accounting and management. His book, How to Prepare a Business Plan, has been translated into several languages.
Buy The Book: How to Prepare a Business Plan
If you want to buy the book How to Prepare a Business Plan, you can get it from the following links:
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