A business plan is one of the most dreaded yet most important necessities for starting a new business. Some think business plans are only for people who are getting a loan from a bank or searching for investors. Others think business plans are a waste of time, or that a mental business plan is just as good as a written one. Others go about it with minimal effort and will only make a partial plan. These are all signs of a poorly educated business mind. Without a good plan, a business is more likely to fail than to succeed.
A number of books can help you create a business plan, such as The Definitive Business Plan. These guides can provide a blueprint for building, running, and expanding your business. The process of creating a business plan will help you understand strategy planning, market research, financial strategies, marketing campaigns, and operational details.
A business plan is not easy to create; it will require writing and rewriting. But there are some basic outlines to follow. Here is a quick guide to where to start and how to complete your business plan.
First, let’s start with the basic elements that a good business plan should include.
- Appealing statement of purpose – This is what you will tell people when they ask you what your business is about.
- Description of your target market – a detailed description of who your market will be and how you intend on attracting that market.
- Product or service description – In this description you need to describe the advantages of your product or service and the challenges.
- List of collaborators – A list of who will work with you to advise and guide certain aspects of you business. It is important to illustrate the qualifications they have to do this.
- Financial plan – This will outline the details of how you intend to raise capital as well as the expenses and profits that you will encounter in the first couple of years.
- List of positives and negatives – This should illustrate the advantages and risks that you business will encounter in its startup and the things that will encourage growth.
Think of your business plan as a map that will help you find your way to your destination at any given time in the life of your business. If your business plan is well thought out and well written, it should be able to help keep you on track no matter what your business is experiencing, good or bad. A business plan has been compared to the centerboard of a sailboat. No matter the direction of the wind, the business plan will help keep you going in the right direction and on course.
You can find examples of business plans online, or you can get one at your local bank to look at before you get started. You can also find books at your local library that contain business plan samples. It is important to think of the sample as just a template, an outline to give you some guidance with the important elements of a plan.
You should not be concerned about the length or complexity of your plan. The only important thing is that it is constructed so that you can understand it and that it has all that you need to help recognize and plan for the obstacles that can be encountered and how to get around them.
For newcomers to business, who do not yet have the abilities needed to operate a business, writing a business plan will provide the direction needed to develop those skills they lack, such as sales and marketing. Typically new entrepreneurs might spend a year going through their plan and strengthening the aspects of the plan that they discover are weak.
People who already have the necessary skill set and training will use their business plan to keep them on track. Among other things, it functions as a checklist, reminding you what needs to be done and when.
When developing your business plan, gather information from many different resources to understand better how you will produce and price your product or service. In the process of writing your business plan, you will discover ways that you can make your business more efficient and profitable. When you are producing financial statements, the plan will be helpful when you analyze the market, expenses incurred, and prices charged. This will give you a better idea of your profit potential. The increased knowledge that you will gain will make you and the potential success of your business more credible.
There is much to be gained from developing your business plan. You will gain ideas and strategies for overcoming adversity that you may encounter. You will have a better understanding of the financial capabilities of the business, which will encourage investors and lenders to give money. The business plan will continue to pay off in the future and can be used to persuade investors and clients later on as well.
You can never have so much to do that you should put your business plan on the back burner. Don’t assume that the only things needed to make a successful business are a good concept and some capital. Being able to plan for your business is a good indication that you will have what it takes to be able to successfully operate a business.