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5 Things You Must Know and Do Before Writing a Business Plan

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Opinions expressed by Entrepreneur contributors are their own.

There are many articles about what to include in your business plan. But what about before you even start writing it? Are there things you need to know? Information you need to compile? Things to consider? You bet. Below you’ll learn five things you must know and do before sitting down to write your business plan:

1. Your business plan is a marketing document

The first thing you must understand before writing your business plan is that your plan is a marketing document. It is not a 50-page dossier explaining everything there is to know about your business. Rather, the document’s purpose is to convince others, such as investors, lenders, partners, employees, etc. to invest their time, money and/or resources in your company.

As such, your plan is a marketing document. It must compel readers to take the actions you want them to take. So, for example, rather than presenting a data dump in which you list every possible fact about your industry, focus on specifying the most relevant facts, and more importantly, discussing how those facts make your company even more likely to succeed.

Related: 7 Steps to a Perfectly Written Business Plan

2. Conduct market research

Before you start writing your business plan, you also need to conduct market research. This involves gathering information about potential customers, competitors and industry sizing and trends.

The purpose of this research is twofold: One, it helps you understand the competitive landscape in which you’ll be entering. Two, it helps you craft a sound and compelling strategy and properly position your company to readers as one that’s poised for success.

Much of the market research you need will be readily available. Look at industry associations or vertical websites that analyze your industry. For example, if looking for research for a business plan to launch a vending machine business, leverage sites like Vending Mavericks.

3. Figure out your precise use of funding

Most business plans are presented to funding sources such as banks, angel investors or venture capitalists in the hopes of raising capital. One of the most important questions these funding sources will ask is how much funding you need and what it will be used for.

Before developing your plan, you need to get a firm grip on this answer. Doing so requires conducting market research. For example, if you plan to hire a new vice president of sales with the funding, research the annual salaries of such positions in your geographic area and/or market. Likewise, if your funding is to build out a restaurant, you need to talk with and get quotes from interior designers, contractors and equipment vendors among others so you have solid estimates of the costs you will encounter.

Related: The Essential Guide to Writing a Business Plan

4. Compile historical financials, and develop financial forecasts

If you’re writing a business plan for an existing business, you must compile all of your historical financial data. That includes past income statements and your current balance sheet.

For both existing and new businesses, your plan must also include financial projections. These projections include income statements, balance sheets and cash flow statements going five years out. Importantly, these projections must give investors and lenders the confidence that if they provide the funding you request, your business will be able to repay the funds (if a loan) from operating profits or gain tremendous value over time (if an equity investment) so the investor can sell their share at a significant profit later.

5. Determine how your business is uniquely qualified to succeed

Finally, you must determine how your business is uniquely qualified to succeed. This involves analyzing your competitive advantages and discussing how they will help you achieve success despite the challenges that may stand in your way.

For example, if you are entering a crowded market with dozens of competitors, discuss what makes your company’s product or service different from theirs and why that’s important. Or if you have a long-standing relationship with an established partner or customer, discuss what that means for your business and how it will help you secure additional resources, customers or profits going forward. Likewise, you may be uniquely qualified to succeed based on intellectual property you have or quality employees you have hired.

Importantly, you must recognize that the most successful companies have unique success qualities. Think through every key aspect of your business, your team, products, services, marketing plan, operations, etc., and figure out what’s needed to be uniquely qualified to succeed in each of these areas.

Related: How to Prepare and Write the Perfect Business Plan for Your Company

Anyone can write a business plan. But writing a business plan that achieves your goals is much more challenging. Those goals may include raising funding, convincing a company to partner with you or developing a solid roadmap for success among others. In any case, knowing and doing the five things mentioned above will allow you to create a winning business plan and achieve lasting success.

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Entrepreneurship

Southwest Develops Software Fix to Prevent Travel Meltdowns

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Following its disastrous Christmas travel season, which saw the cancellation of 16,700 flights, Southwest Airlines is testing new software fixes — and facing an inquiry from the Dept. of Transportation (DOT) for “unrealistic scheduling of flights.”


Lowe Llaguno | Shutterstock

CNN reports that the airline’s existing software system will remain in place. However, changes stemming from Southwest’s review include a new command center team, telephone system improvements, and overall improved preparedness for inclement weather.

In a Thursday call with investors, the Portland Press Herald reports that Southwest CEO Bob Jordan defended the company’s systems and operating plans, saying, “Based on what we know at this point, our processes and technology generally worked as designed.”

Southwest also announced Thursday that it had a third-quarter 2022 loss of $220 million in revenue. At the same time, Jordan assured investors that issues dogging the airline throughout the holidays won’t “ever happen again.”

Southwest had many cancellations over the holidays partly because their system requires crew members to call in instead of updating their availability electronically. On Thursday, the company’s COO, Andrew Watterston, called that “a problem” and then elaborated, “It wasn’t the problem for the situation. It was a symptom of the problem.”

According to Jordan, switching to electronic notification will necessitate changes in pilot and flight attendant labor contracts. CNN says Southwest is currently negotiating to replace existing contracts covering various issues, including pay and benefits.

Despite tech failures, the Press Herald notes that Bob Jordan said Southwest would shell out $1.3 billion for its upcoming upgrades this year. The “recent disruptions,” Jordan said, “will likely accelerate some of our plans to enhance our processes and technology.”

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Entrepreneurship

Southwest Develops Software Fix to Prevent Travel Meltdowns

Published

on

Following its disastrous Christmas travel season, which saw the cancellation of 16,700 flights, Southwest Airlines is testing new software fixes — and facing an inquiry from the Dept. of Transportation (DOT) for “unrealistic scheduling of flights.”


Lowe Llaguno | Shutterstock

CNN reports that the airline’s existing software system will remain in place. However, changes stemming from Southwest’s review include a new command center team, telephone system improvements, and overall improved preparedness for inclement weather.

In a Thursday call with investors, the Portland Press Herald reports that Southwest CEO Bob Jordan defended the company’s systems and operating plans, saying, “Based on what we know at this point, our processes and technology generally worked as designed.”

Southwest also announced Thursday that it had a third-quarter 2022 loss of $220 million in revenue. At the same time, Jordan assured investors that issues dogging the airline throughout the holidays won’t “ever happen again.”

Southwest had many cancellations over the holidays partly because their system requires crew members to call in instead of updating their availability electronically. On Thursday, the company’s COO, Andrew Watterston, called that “a problem” and then elaborated, “It wasn’t the problem for the situation. It was a symptom of the problem.”

According to Jordan, switching to electronic notification will necessitate changes in pilot and flight attendant labor contracts. CNN says Southwest is currently negotiating to replace existing contracts covering various issues, including pay and benefits.

Despite tech failures, the Press Herald notes that Bob Jordan said Southwest would shell out $1.3 billion for its upcoming upgrades this year. The “recent disruptions,” Jordan said, “will likely accelerate some of our plans to enhance our processes and technology.”

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Entrepreneurship

5 Ways to Become a Better Public Speaker This Year

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Opinions expressed by Entrepreneur contributors are their own.

The ability to speak publicly is a skill that everyone can use. From coaches to entrepreneurs and writers, anyone who wants to get out into the world to market what they do needs to be an effective speaker.

This article will discuss five ways to become a better public speaker — five methods for sharpening your raw talents to morph into a more effective communicator overall.

Related: This Is the One Thing You Need If You Want to Get Paid Speaking Gigs

1. Practice in different environments

This tip comes from an exercise that musicians sometimes use while practicing.

The idea is to see if you can replicate your performance no matter where you are. As a speaker, you will encounter all kinds of scenarios and audiences. You have surely had distractions around you, being in front of people with different interests, being under different lighting and noise conditions and more.

Practicing speaking in different environments will force you to get comfortable performing under all circumstances. Without the crutch of your favorite environment, you have to remember your lines and recall cues completely on your own.

Related: 4 Expert-Backed Strategies for Improving Your Communication Skills

2. Produce different kinds of ‘speaking’ content

Another tip for becoming a more well-rounded speaker is to produce a variety of speaking content. Speakers don’t always have to stand on a stage and talk to live audiences.

I create speaking content across many channels — from my website and blog to YouTube and my podcast series. I distribute audio and video recordings of my speeches to my clients and promote them on my social channels. I go live on Facebook and other platforms to speak directly to my audiences that way. You can do the same.

This variety isn’t by accident. Producing these different types of content in the digital space allows individuals to sharpen their speaking skills and reach larger audiences than they could in person.

3. Get active on audio platforms

Here’s a speaking tip that doesn’t involve performing as much as learning from what others are already doing: Get active on professional audio platforms such as Clubhouse and Twitter Spaces to meet with like-minded individuals and discuss relevant topics.

Doing this lets you compare notes with industry counterparts while working on your speaking skills. You will endeavor to communicate with other business leaders and coaches from around the world and all different walks of life.

Related: The Role of Effective Communication in Entrepreneurial Success

4. Take every opportunity to speak

Speak to a group at every available opportunity. I used to wonder how I could speak to an audience when the professional invitations dried up for a bit, and the answer was local service groups.

Toastmasters International, Rotary International, Lions Clubs International and the Freemasons are all great examples of the types of organizations that not only perform good works for their local communities but also welcome speakers and presenters to deliver valuable information to their members.

I find chapters of these groups in many cities and towns that I visit. Having these groups near me allows me to cut down on my travel time and simply makes it more convenient to continue practicing speaking skills while also putting my abilities to good use for my community.

Not only will this help you with your skills at public speaking, but it’s a rewarding experience as well.

5. Work with a speaking coach

Finally, every speaker-in-training could benefit from working with a speaking coach or mentor. These professionals provide their clients with professional tips and feedback on everything from the words they’re using to how they’re delivering them to audiences.

Some speakers wonder why they can’t just rely on their friends and families to provide them with honest feedback, and there are some good reasons for not doing that. Family and friends are kind, but that’s exactly the problem. Speakers need the unrelenting honesty of professional coaches if they truly want to leave their bad habits behind and become stronger.

I hired a professional speaking coach to improve my skills, and I can attest that it pays dividends every single day in my career.

Related: Leading Speaking Coach Shares His Strategies To Get A Flood Of Clients From Webinars And Virtual Presentations

Communication is everything to professionals

Whether it’s in the world of business, non-profits or coaching, speaking effectively is vital to success. Communication means everything to professionals, and those who can’t tell others what they do and what they’re about can’t expect to get their visions too far off the ground.

I followed these five actionable tips for becoming a better speaker, and I came out on the other side as a communicator that I never even thought possible. You will do the same.

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