Table of Contents
Write Your Business Plan

How to Use Your Business Plan Most Effectively From raising money to attracting employees, here are five ways to make sure your plan gets you what you need.

By Eric Butow

Key Takeaways

  • How to use your business plan to raise money
  • How to use your business plan to attract employees
  • How to use your business plan to demonstrate trustworthiness

Opinions expressed by Entrepreneur contributors are their own.

This is part 3 / 12 of Write Your Business Plan: Section 1: The Foundation of a Business Plan series.

Your business plan can be used for several things, from monitoring your company's progress toward goals to enticing key employees to join your firm. Deciding how you intend to use yours is an essential part of preparing to write it. Here are questions to ask yourself during the planning process.

Using Your Plan to Help Raise Money

If your goal is to raise money, you'll have to focus very carefully on the plan's executive summary, management, marketing, and financial aspects. In addition, you'll need to have a focused vision of how your company will make money. If you're looking for a bank loan, you'll need to stress your ability to generate sufficient cash flow to service loans. Equity investors, especially venture capitalists, must be shown how they can cash out of your company and develop an acceptable return rate.

Related: How To Create A Business Plan Investors Will Love

Using Your Plan to Attract Talented Employees

Emphasize such things as stock options and other aspects of compensation, as well as location, work environment, corporate culture, and opportunities for growth and advancement. If you're a high-tech startup, top employees are likely to ask to see your plans for attracting venture capital and later selling out to a bigger firm or going public so they can realize the value of their stock options.

Using Your Plan to Show You're a Worthy Customer

A solid business plan may convince a supplier of some precious commodity to favor you over your rivals. It may also help you to arrange supplier credit—one of the most useful forms of financing for a small business. In this plan, you may want to stress your blue-ribbon customer list and spotless record of repaying trade debts.

Related: How To Craft A Business Plan That Will Turn Investors Heads

Using Your Plan to Show You're a Dependable Supplier

You'll want to emphasize your staying power, innovation, and special capabilities. In this plan, unlike the supplier-targeted one, you may want to play down relationships with other big customers, especially if they are foes of the one you're wooing.

Using Your Plan For Internal Purposes

If you're keeping your plan in-house, you'll want to build in many milestones, benchmarks, and other tools for measuring and comparing your future performance against the plan. Such things may be of little interest to a banker evaluating your loanworthiness. Still, they could make all the difference between a helpful plan and one that's no good for monitoring corporate performance.

These distinctions are not merely academic. A plan that's well suited for internal purposes would probably be entirely wrong for taking to a potential Fortune 500 customer. Actually, the marketplace of business plan consumers is even more finely segmented than that. A plan for a bank, for instance, wouldn't accomplish much by including a strategy for selling the company to a large conglomerate several years down the road, whereas a venture capitalist would look for your exit strategy very early on.

Related: The Main Objectives Of A Business Plan

Consider all this and keep it in mind as you plan. You'll have to decide what to include or leave out and what to stress or play down. Setting some direction about how you intend to use your plan will make those later decisions faster and more accurate.

Because many entrepreneurs utilize business plans for various purposes, you'll want to have several versions available. By carefully editing and rewriting certain sections with your audience in mind, you can have plans ready for different occasions. The plan for raising funding will likely be more extensive and detailed than the plan for attracting new employees, who may not want to read as much but will want some answers to the question, Why should I work at your company? While the business plan is the sum of various sections, how you massage and edit those sections can help you utilize it for various purposes.

Consider that once you've created a good business plan, you should use it in many ways, including self-motivation and guidance as you make business decisions and undergo changes.

Get the Right Software

Once you've determined the purpose of your plan (and considered to whom you will send it), you'll want to take a practical approach and consider some of the software tools of the trade.

While you remain in the driver's seat, writing the plan and doing all the heavy thinking, your business plan software can handle research, organization, calculations, and more. Of course, you don't have to use specific business plan software to write your plan. Microsoft Office or any similar software on which you can write each section of your plan can serve your purpose. You can even use Excel, Google Sheets, or other spreadsheet software to handle the financial pages.

Related: How To Write A Business Plan

However, if you want the guidance of a software program, look for one that meets your computer capabilities, has tech support readily available, and is highly rated. You should also ask other business owners, perhaps in your local chamber of commerce, which ones they used and what they have to say about the software.

At Capterra software, you'll find product comparisons, including research tools provided, printing and publishing, support, and more. Look the plans over and decide which one has what you need.

For a tool that helps you manage and grow your business even past that initial starting phase, you can try out LivePlan. When asked what sets them apart, LivePlan says, "While other business planning apps become irrelevant once your plan is complete — that's just the beginning with LivePlan. Goal tracking, performance dashboards, and forecast scenarios will empower you to confidently answer important questions like, 'How can I use this funding to help my business?' 'Where should I invest my marketing to grow?' and 'What happens if I have a bad month?'"

Related: When Is The Best Time To Write Your Business Plan

The functionality of the software and how much instruction is provided are key to making an informed decision. Many have the same or similar features, but those that you can learn without tearing your hair out are the best choices. The latest in software is designed to walk you through the process. However, some walk you more directly while others walk you in a circle before getting you to where you want to go. Do your research.

However, the bottom line with software is that it can only provide what you ask for. Too often, people misunderstand the capabilities of software. Remember, it cannot write the business plan for you.

Among the various software options, three popular programs are LivePlan, Bizplan, and Enloop.

Related: 12 Reasons You Need A Business Plan

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