What Are the Best Tips for Creating an Entrepreneur Business Plan?

The term "entrepreneur business plan" is usually used to describe start-up or new business ventures that are not backed by already-existing companies. Development of such a plan can be both challenging and time-consuming, but an effective plan can make the difference between a successful venture and a dream that never gets off the ground. To create an effective plan, entrepreneurs should keep their audiences top of mind; should create an engaging, informative executive summary; and should back up their claims and ideas with realistic, honest facts and figures that clearly demonstrate probable success.

Possibly the most important tip to keep in mind when writing an entrepreneur business plan is to know the audience. Understanding what the audience most wants to know will help a prospective business owner write a plan that is most likely to net what he needs. For example, if the goal of the business plan is to secure bank financing, the plan should demonstrate the creditworthiness of the venture, along with a cash flow plan that clearly shows an ability to begin making payments on schedule and to continue to make them on time until the business is operating in the black. Ideally, such a plan should demonstrate that a substantial portion of the funds will be used to purchase real property that can be repossessed and sold in the case of a default, as this would make a loan less risky for a financial institution.

If, on the other hand, the intent of the plan is to secure a private investor, the audience will be interested in slightly different aspects of the plan. In this case, the entrepreneur business plan should clearly show how much risk is involved for the investor, how much return he can expect to see on his investment, and how soon profits will begin to be distributed. Most entrepreneur business plans are intended to secure funding, but other purposes might include providing a clear plan for moving the business forward or demonstrating probable success. Regardless of the intent, the important part is to ensure that the plan highlights the aspects most important to the audience.

Another important tip for those writing an entrepreneur business plan is to be honest and realistic. Standard business plans include a section for competitor analysis, for instance. It is important to be as thorough and honest as possible in this section. Underestimating a competitor or competition in general can cause serious problems down the road, and if such miscalculation is apparent to an investor, may cause him to question the plan writer's understanding of the market.

It is also important to ensure that all calculations and projections are realistic. Estimating conservatively may be one way to ensure that projections are believable, but the plan writer must be careful not to provide numbers that are so conservative that they fail to support the probability of success. Another option is to provide three sets of projections: one conservative, one probable, and one optimistic.

The executive summary of an entrepreneur business plan also is critical. This is the part that most audiences will read first. If they fail to be engaged or if the section fails to summarize what they need to know, they will be more likely to pass. Executive summaries should be brief overviews that contain only high-level information, but presented in a way that interests the target audience.

While the executive summary must be brief, detailed backup is a must. Backup facts and figures should be clear, detailed, and should prove the premise of the plan without undue doubt. Figures should be clearly displayed in tables or graphs when possible, and all sources used should be reputable and clearly attributed.