Planning for Success:
Why Your Business Needs a Business Plan
Getting your business thoughts down on paper is key to your success. This plan - this business plan - will help keep your goals in focus, and guide you as your business grows.
It is also necessary to help you get financing if you need money from a lender to get your business off the ground.
Five Questions To Answer about your Business
The best way to write a simplified business plan is to examine and answer the following questions:
- What?
- Who?
- Where?
- How?
- Goals?
To answer the “what” question, you need to understand what your business is and what it does.
The “who” question can be a bit tough in the beginning. You can begin to think of this in terms of who you would like to have as a client. And what type of client will be most interested in what you have to sell.
“Where” is an easy question to answer. The answer is either going to be in the geographical location of your office or store, or it is national or international if you are an e-commerce business.
“How” will you get started? This is often assigned the name “start up costs” as well as essential skills.
Finally, you have the “goals” question. What do you want to achieve and how will you achieve them?
Making Your Business Plan Formal
A formal business plan has many well-defined sections. These include:
- Executive Summary: This should include everything that you would cover in a five-minute interview, answering the questions outlined in the simplified business plan above.
- General Company Description: This is where you explain what your company does. It often has the subsections of mission statement, goals and objectives, business philosophy, description of the industry, business strengths, and legal from of ownership.
- Products and Services: Here you will describe, in depth, the services or products you will offer. You will also discuss the advantages and disadvantages you have over your competitors as well as your pricing system.
- Marketing Plan: Here you will explain the economics, services, customers, competition, niche, strategy, and sales forecast for your business.
- Operational Plan: In this section you will explain the daily operation of the business, its location, equipment, people, processes, and surrounding environment.
- Legal Environment: The legal environment section will describe your licensing requirements, needed permits, workplace regulations, zoning, insurance, trademarks, copyrights, and patents.
- Management and Organization: In this section, you will explain who will manage the business on a day-to day basis, as well as the experience this person or people bring. You will also list any team members such as accountants or attorneys you will work with.
- Personal Financial Statement: Include personal financial statements for each owner and major stockholder, showing assets and liabilities held outside the business and personal net worth.
The real value of creating a business plan is not in having the finished product in hand; rather, the value lies in the process of researching and thinking about your business in a systematic way.
The act of planning helps you to think things through thoroughly, study and research if you are not sure of the facts, and look at your ideas critically.
It takes time now, but avoids costly, mistakes later.
Next Page:
Three Main Reasons For Having a Business Plan
|
|
