The business plan which you create will require information specific to your industry and your company and should be based on real market information and your best-estimate projections.
What is a business plan?
A business plan is the written document details the proposed venture. It must describe current status, expected needs, and projected results of the new business.
The aspect that needs to be covered: the project, marketing, research, essential critical factors to the business success of planned undertaking. It formulates realistic goals, commitment, milestones, and flexibility. It shows where the business to go with the entrepreneur’s roadmap for a successful enterprise.
Realistic goals explained the specific, measurable, and set within time parameters to reach business goals. Commitment from the supportive networks which including employees and team members. Milestones well structured the subgoals achievement and the continuity. Flexibility by means of obstacles must be anticipated, and alternative strategies are well formulated.
What are the objectives of business plan?
1. Set specific objectives for managers. Good management requires setting specific objectives and then tracking and following up. I'm surprised how many existing businesses manage without a plan. How do they establish what's supposed to happen? In truth, you're really just taking a short cut and planning in your head--and good for you if you can do it--but as your business grows you want to organize and plan better, and communicate the priorities better. Be strategic. Develop a plan; don't just wing it.
2. Share your strategy, priorities and specific action points with your spouse, partner or significant other. Your business life goes by so quickly: a rush of answering phone calls, putting out fires, etc. Don't the other people in your business life need to know what's supposed to be happening? Don't you want them to know?
3. Deal with displacement. Displacement is probably by far the most important practical business concept you've never heard of. It goes like this: "Whatever you do is something else you don't do." Displacement lives at the heart of all small-business strategy. At least most people have never heard of it.
4. Decide whether or not to rent new space. Rent is a new obligation, usually a fixed cost. Do your growth prospects and plans justify taking on this increased fixed cost? Shouldn't that be in your business plan?
5. Hire new people. This is another new obligation (a fixed cost) that increases your risk. How will new people help your business grow and prosper? What exactly are they supposed to be doing? The rationale for hiring should be in your business plan.
6. Decide whether you need new assets, how many, and whether to buy or lease them. Use your business plan to help decide what's going to happen in the long term, which should be an important input to the classic make vs. buy. How long will this important purchase last in your plan?
7. Share and explain business objectives with your management team, employees and new hires. Make selected portions of your business plan part of your new employee training.
8. Develop new business alliances. Use your plan to set targets for new alliances, and selected portions of your plan to communicate with those alliances.
9. Deal with professionals. Share selected highlights or your plans with your attorneys and accountants, and, if this is relevant to you, consultants.
10. Sell your business. Usually the business plan is a very important part of selling the business. Help buyers understand what you have, what it's worth and why they want it.
11. Valuation of the business for formal transactions related to divorce, inheritance, estate planning and tax issues. Valuation is the term for establishing how much your business is worth. Usually that takes a business plan, as well as a professional with experience. The plan tells the valuation expert what your business is doing, when, why and how much that will cost and how much it will produce.
12. Create a new business. Use a plan to establish the right steps to starting a new business, including what you need to do, what resources will be required, and what you expect to happen.
13. Seek investment for a business, whether it's a startup or not. Investors need to see a business plan before they decide whether or not to invest. They'll expect the plan to cover all the main points.
14. Back up a business loan application. Like investors, lenders want to see the plan and will expect the plan to cover the main points.
15. Grow your existing business. Establish strategy and allocate resources according to strategic priority. You can find more information about growing your business with a business plan by reading " Existing Companies Need Planning, Too ."
STEPS IN MAKING BUSINESS PLAN
BUSINESS PLAN STEP 1:
Determine the purpose of your business. Identify it on paper and go into as much detail as you can at this point. For instance, are you providing a service to the community? Perhaps you are selling a product. Write down what you want the focus to be.
BUSINESS PLAN STEP 2:
Who is your target consumer? Will it be men or women? Old or young? Individuals or businesses and corporations? Local consumers or long distance consumers? All of these are very important to know before proceeding to the next step.
BUSINESS PLAN STEP 3:
Decide how to market to your target consumer. Will you use the Internet? Newspapers? Maybe you will make packets to deliver to local businesses and corporations in an effort to gain their business.
You will need a clear understanding at this step of the purpose of your business and your target consumer. For instance, you will most likely not need to place a newspaper ad if you are providing corporate services, and you will probably not need a business packet if you are advertising to the general public.
BUSINESS PLAN STEP 4:
Where will your business be based out of? Will you work from home, or do you need a location? Obviously if you are running a store, you will need a store front. Location is key, so start researching now how much rents are in your desired location. You would want a high traffic, or easily accessible area for a store.
Perhaps you are just selling stuff online, in which case you don't need a store, but either enough space in your home if you have inventory or a storage unit.
If you are a service provider, you may or may not need a location outside of your home. These are all questions you need to answer to define your business structure.
BUSINESS PLAN STEP 5:
What kind of tangible items will you need to get your business started? Do you need inventory? You will most likely need an assortment of office supplies no matter what your business. Items such as a computer, printer, fax machine are all typical office needs in todays society.
Do you need equipment? This is a good time to research what you may need in the way of equipment for your business. Make a detailed list so you can easily research costs for each.
BUSINESS PLAN STEP 6:
Create a chart to calculate costs. This is the step you perform all the research and write down the costs of everything in the above steps. Don't just guess, but do some actual research. This will include making telephone calls and doing internet searches as well. Creating a list will give you a good idea of what finances you will require in order to get started. Once you have that number calculated, add an additional 10% for incidentals.
BUSINESS PLAN STEP 7:
Draft your "Action Step" list. At this step, while looking over the first 6 steps, create your "Action Step" list, or your "To Do" list. This will and should be extensive. There are many things to do when starting a business.
Once you have completed all seven steps, you are ready to move on. You may want to consider hiring a professional business plan writer, or at the very least, you may want to take a class in business plan writing.
Other things to consider are consulting an attorney to answer your legal questions. Do you need a license? Should you incorporate?
You should also visit an accountant who specializes in small businesses. He or she can give you great financial advice before you get started so you are aware of all the financial aspects and repurcusions of starting a business.
In any event, it is possible to start your own business. Just be sure to do it right, do your research and stay motivated!
WHY BUSINESS PLAN FAIL
The plan is constructed around strategies that are defined inaccurately.
The plan, while substantial, cannot be described clearly by management.
The plan lacks detailed information about job responsibilities and operating schedules.
The plan does not state goals and objectives lucidly and in professional terms.
The plan is incomplete.
Benefits of a Business Plan
The entire business planning process forces the entrepreneur to analyze all aspects of the venture and to prepare the effective strategy to deal with uncertainties that arise.
1. The time, effort, research, and discipline needed to put together a formal business plan force the entrepreneur to view the venture critically and objectively.
2. The competitive, economic, and financial analysis included in the business plan subject the entrepreneur to close scrutiny of the assumptions made about venture’s success.
3. Since all aspects of the business venture must be addressed in the plan the entrepreneur develops and examines operating strategies and expected results for outside evaluators.
4. Drives an entrepreneur using the right communication tools for outside financial resources which needs standard preparation of business plan.
5. An effective business plan provides true information in getting more investors. Investors will delve into the pro forma statement details provided for their decision making in pursuing their investment into the proposed business e.g. bank, financier, institution, individual, etc.
6. Pro forma statements written reflected the actual adequate return on equity and the service-to-debt as well.
7. Critical risks factor comprehensively handle through risks management written in business plan also as great tools for investors to determine an entrepreneur is ready to face contingencies and the unprecedented financial risks.
8. A comprehensive and concise overview on the entire business operation gives true and through business financial evaluation.
9. Well explained the continuous plenty opportunities building in business operation: planning, organizing, departmental, and control. Obviously gives proves the quality management and production.
The entire business planning process forces the entrepreneur to analyze all aspects of the venture and to prepare the effective strategy to deal with uncertainties that arise.
1. The time, effort, research, and discipline needed to put together a formal business plan force the entrepreneur to view the venture critically and objectively.
2. The competitive, economic, and financial analysis included in the business plan subject the entrepreneur to close scrutiny of the assumptions made about venture’s success.
3. Since all aspects of the business venture must be addressed in the plan the entrepreneur develops and examines operating strategies and expected results for outside evaluators.
4. Drives an entrepreneur using the right communication tools for outside financial resources which needs standard preparation of business plan.
5. An effective business plan provides true information in getting more investors. Investors will delve into the pro forma statement details provided for their decision making in pursuing their investment into the proposed business e.g. bank, financier, institution, individual, etc.
6. Pro forma statements written reflected the actual adequate return on equity and the service-to-debt as well.
7. Critical risks factor comprehensively handle through risks management written in business plan also as great tools for investors to determine an entrepreneur is ready to face contingencies and the unprecedented financial risks.
8. A comprehensive and concise overview on the entire business operation gives true and through business financial evaluation.
9. Well explained the continuous plenty opportunities building in business operation: planning, organizing, departmental, and control. Obviously gives proves the quality management and production.
