20 Things You Need to Know when Writing a Business Plan
This Special Report was developed from years of personal experience and in
talking and interacting with Angel Investors and Venture Capitalists. It is not
designed to be the end all of Business Plans, but does give you some insight on
what is expected of a Business Plan.
About the Author
Tom Martucci has been in his own business since he was 28 years old. He has
started five companies and has built sales up to $10 million in one of the
He has been coaching and consulting clients for four years and has a very
narrow niche on the type of clients he works with. The clients have to have
sales of $10million or less and also have less than 20 employees. Tom’s
philosophy is simple and direct. He feels you have to walk in a person’s shoes
in order to understand and assist them in accomplishing their goals and
Tom has developed many different Business Plans for his own companies, and
Martco Associates has done many other plans for existing businesses and
startup companies. He has made presentations to Venture Capitalists and
Angel Investors on a one to one basis and in front of groups of 50 to 765 Angel
Investors and Venture Capitalists on his own behalf and on the behalf of his
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Copyright 2008, Martco Associates a division of Jancris International
Top 20 Things to Know When Writing a Business Plan
The Business Plan is a planning process and document that every business
(new or existing), regardless of size, needs to go through. It becomes a road
map on how you plan to do business over the next year or two. Business Plans
do not have to be 30 pages in length, but they should be complete and well
thought out. If you develop and work your plan, you will be heading in the
right direction to a successful business. However, it should be updated yearly
and reviewed with your key staff quarterly.
I would always have a current and updated copy of the Business Plan to review
with my current lenders or potential new lenders. So much of what a lender or
new lender wants to know is in the plan. If nothing else, we would be able to
present ourselves in a professional manner.
Most Business Plans are done when a new company is trying to find outside
financing or an existing company is looking for additional financing.
1. A plan is critical to operating a successful business!
Outsourcing the writing of your Business Plan is not the best
approach. You are the expert of your business. By doing the Business
Plan you need, you may uncover different strategies and understand
your competition better. You will determine what is realistic based on
your company’s strength and weakness in personnel and finance. If
you are going to use it to try to secure financing, you no doubt will be
challenged on some assumptions and only you can defend them.
Yes, outsource the physical typing, proofing and layout of your plan
and have someone such as your business coach or mentor go through
it to get a second or third opinion, especially if you are seeking
2. Start with an Outline. This will be your road map to follow in
developing your plan. You can find a sample outline almost anywhere
or go to: www.martcoassociates/businessplanoutline to see one we
have used for some of our clients.
3. Your Plan will take more than few hours to complete! The
business planning process is very time-intensive. You must be
prepared to spend adequate time researching, planning and preparing
your Business Plan especially the first time. Get your key people
involved in developing the plan. They are the ones who are going to
have to help you implement the plan. I know you are saying to yourself
this is a lot of work and lot of my key personnel’s time to develop a
Step back for a moment, you should be developing a sales and
marketing plan for your business each year. This is one of the key
elements of a Business Plan and key to a successful business. You have
to determine if you can fund your business, your marketing plan, new
services, or products and you should do a yearly financial plan. You
should already know your competitors and your market, so you have
completed the hardest section of the plan. We can go on and on, but I
think you get the point. You no doubt are doing this either on a
notepad or in your mind, etc. All you need to do is formalize those
thoughts and notes.
After you do each section, you will need to, as I say, “Make it look
pretty” and correct the spelling and grammar. That aspect of the plan
can easily be outsourced.
4. Answer the key questions: who, what, when, why and how
much! Regardless of whether you are seeking outside financing or not,
you should be asking this question constantly on all the issues in front of
The Business Plan should address these questions in every aspect of
your business, then you are on your way.
5. Research and Then More Research! Whether the plan is for
your ongoing business or you are trying to obtain additional financing,
research every aspect thoroughly. The internet has made this so much
easier and better than in the past. Who is your current customer and
who are the customers you are trying to add? What is the size of your
targeted market and is it realistic?
The plan needs to tell the story, so research all components and write
a comprehensive, detailed plan. If you are going to use your Business
Plan to obtain financing, the completed plan should "tell the story" of
your business to a potential lender. The plan should serve as a stand-
alone document, meaning that all business issues are addressed.
6. Sales and Marketing! I believe that this is the most important part
whether you are seeking funding from a lending institution, Angel
Investor or Venture Capital financing. If you do not have a clear and
specific sales and marketing plan, the chances for the business to fail
increase tenfold. I have always believed “nothing happens until
something is sold”. If you are an ongoing business, the need for a well
thought out sales and marketing plan is as critical to your success as
At a conference where panels of Angel Investors and Venture
Capitalists were discussing Business Plans, three out of the four
panelists agreed that the sales and marketing of a plan is a major
factor in their decision. If that is not rock solid, they go no further in
reviewing the plan.
7. Know your competition. If you are trying to fund a new business,
the quickest way to kill any opportunity of seeking outside funding is
to say you have no competition. Every company and every idea has
competition. Research your competition and understand their
strengths and weaknesses. It will demonstrate to you where
opportunities lie and areas to avoid. You should not worry about your
competition or stress over what or how they do things. If you have a
well thought through plan that is funded, then worry about your
business but always keep an eye on your competitors
8. Prepare a financial plan. If you are an ongoing business, this is a
critical section. You have the history which is part of your plan. Use
historical averages. The projections should match yours. Is your
growth within the historical growth you have had in the past or is it
much greater? If so, the reasons for the growth need to be easily
followed and substantiated. If your plan is for a new business, do not
over estimate. Many Angel Investors believe that all Business Plans
are overzealous in their projections and under estimate their expenses.
Taking the time to collect good and accurate cost estimates improves
your chances for success. Determine all possible costs for starting
and/or operating your business. Make a list of one-time and recurring
9. Do not make them search or ask the amount of funds
needed if you are using your plan to obtain financing. If
you are going to use your plan to apply for a start-up loan or growth
funding through traditional sources, specifically state the amount of
funds requested, planned use of those funds, and demonstrate how
those funds will be repaid.
It is also important to state the amount of your planned owner's cash
contribution to the project as well as identify the collateral available to
secure the loan. If you are not willingly to gamble on your idea, why do
you think someone else will? Nobody said being in your own business
is for people with a weak heart or stomach. If you are seeking funding
from Angel Investor or Venture Capitalists, you need to show them a
return on their investment in the range of five to ten times their
investment and an exit strategy. Usually they really want to be out
after three to five years.
10. Revise and modify your plan. This is a flexible document. If you
are a new business seeking funding as you present your plan, continue
to research. You may discover that you need to make some changes.
Keep the plan current and fresh. If you are an ongoing business, things
happen that are unpredictable and totally out of your control that may
cause you to adjust or change your plan. That is why you need to
review the plan each quarter.
So often I tell my clients that a Business Plan is like a road map or in
today’s terminology a GPS. In getting from point A to Point B, you can
go many different ways and you may encounter detours along the way
so you adjust. That is how you need to look at and work with your
Business Plan. If you keep your plan up to date, you will always be
ready to review it with a potential outside investor or funding
11. Discuss your own and other key executives’ experience and
skills in detail. Your business idea or current business strategy may
be a viable one, but without good management skills to execute it,
your chances for success are limited. Past experience within the
industry is valuable and gives you credibility. Thoroughly describe
your past experience with the business. Your key executives’
experience should also be detailed. If you are new to the business or
do not have key executives, discuss your plans for training and hiring
key personnel, etc.
The investor looking at your company to invest in is really looking at
you and your key management team. They see that as a critical
element of the business because they are investing in you and your
team to execute the plan.
12. What are the strengths and weaknesses of your business?
Every business, new or old, has strengths and weaknesses. The
preparation of a well thought out Business Plan will easily expose
those weaknesses to you. You need to address what the corrective
action is to solve these weaknesses.
You need to determine how you can exploit your strengths to make
your company better. I think determining your strengths and
weaknesses should be one of the first things you do in preparing your
Business Plan. It will help you to develop your sales and marketing
plan and your financial plan (do you need to add personnel to correct
13. Use your plan to benchmark actual performance and
compare to your expectations. Your completed plan is a valuable
tool in the management of your business. Review the progress and
performance of your business against expectations and assumptions.
Modify your plan when appropriate. Use your plan to guide the
decision-making process so that your business stays focused on
achieving its long-term goals. How are you doing? Are you
accomplishing your sales and financial objectives?
14. Don't assume you are required to use software. If your
Business Plan is for internal use only, do not feel that you have to rush
out and buy software. Use your Word and Excel to formulate a plan. If
you are going to look for outside financing, the use of software is a
good investment. We feel BP Plans.com is the best.
15. Forget those boilerplate plans. These are the plans you see
offered for a variety of businesses. All you need to do is insert your
name and data. Use the boilerplate plan outline or the outline we
provide to you as a guide. It does not usually address your specific
needs. If you are seeking outside financing, without a doubt the
person(s) reading it will know very quickly if it is a “boilerplate plan”
and it will be dealt with accordingly (trashed).
16. Misspelling and grammatical errors are killers. Misspelled
words and grammatical errors point to a lack of detail. Use the spell
and grammar check on your computer. If you are going to use your
Business Plan to seek outside financing, definitely hire a proofreader.
17. Don't assume the reader of your plan is an expert in the
industry. Typically, readers of Business Plans see many throughout
the course of the year. Most likely, a lender or other reader will not be
an expert on your business type. Therefore, you must explain all
technical/operational details as well as avoid unnecessary use of
industry jargon. It has to tell the story in an easy to understand way
and needs to be all inclusive. Do not hide or leave out relevant facts. It
will demonstrate that you did not do your homework.
18. Do Use Milestones. If this is a start-up, indicate what has to be
done by a certain date and by whom in order to accomplish the
objectives set out in the plan.
19. Due Diligences! If you are seeking outside funding from a Venture
Capitalist and/or Angel Investor, realize they are very savvy business
people. They will have an associate(s) perform “Due Diligence” not
only on the financial numbers but they will validate the market and
market size in your claims.
20. 4 C’s of Lending – Small businesses securing funding or increasing
credit lines need to have a well thought out plan. However, it always
comes down to the 4 C’s of Lending
• Character - what kind of “Financial Citizen” is this person or
• Capacity - ability to generate revenues to pay back the loan or give
a significant return on their investment
• Capital Assets - does the business have any equipment, fixtures,
etc. that could be liquidated to repay the loan
• Collateral - what cash and assets do you have that will be pledged
to repay the loan? Small business owner seeking a loan in today’s
world will without fail have to personally sign for the loan.
What totally shocks me is how much time and effort small business owners
put into a Business Plan and after it is completed and used to secure funding,
the plan goes on the shelf never to be looked at again.
On our website www.martcoassociates/articlestools in the Special Reports
section you will find a multitude of articles and tools that can give you more
insight on Business Plans.
Martco Associates is a consulting and coaching firm that specializes in small
businesses under $10 million, less than 20 employees and startup companies.
Tom Martucci has been in his own business most of his adult life. This
represents the size of the businesses he has owned and has had hands on
Tom Martucci has worked on and developed hundreds of Business Plans and
presented Business Plans to numerous Angel Investors and Venture
Capitalists for his own firms and as a consultant.
He can be reached at firstname.lastname@example.org,
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