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More than Words – Creating a Useful Business Plan

You’ve heard it a million times: you must have a business plan to succeed. It’s a no-brainer in the world of small business. A business plan precisely defines your business, identifies your goals, and serves as your company’s resume.

But more than that, your business plan should have a way for you to track progress and to identify tactical steps to that your plan is more than just words on paper, it is actually a document that is a part of your living, breathing business.

Sure, it might seem like a boring exercise to define the business you are in. But actually, many owners have gone broke because they never answered that question. Or, they never quite knew why they should or how to develop a business plan.

Let’s start with the basics. A business plan is a tool with three basic purposes: communication, management, and planning. As a communication tool, it is used to attract investment capital, secure loans, convince workers to join and assist in attracting strategic business partners. A complete business plan shows whether or not a business has the potential to make a profit. It requires an honest look at almost every phase of business and allows you to show that you have worked out all the problems and decided on potential alternatives before actually launching your business.

As a management tool, the business plan helps you track, monitor, and evaluate your progress. The business plan is a living document that you will modify as you gain knowledge and experience. By using your business plan to establish timelines and milestones, you can track your progress and compare your projections to actual achievements.

As a planning tool, the business plan guides you through the various phases of your business. A thoughtful plan will help identify obstacles so that you can avoid them and establish alternatives. Many business owners share their business plans with their employees to cultivate a broader understanding of where the business is going.

All three of those purposes are important, but be sure to particularly remember the management and planning aspect. That ensures that you are actively involved with executing your business plan and tracking the goals you’ve set out to achieve.

In Focus: The Useful Business Plan
In order to be a truly usable tool, a business plan should be a work-in-progress. Even successful, growing businesses should maintain a current business plan. It doesn’t need to be fancy, complicated or difficult, it just needs to be clear and manageable.

Remember, your goals are to show your expertise in your business, to “sell” your business to prospective customers (such as investors and employees), and to design a management tool that works for you.

Every successful business plan should include something about each of the following areas:

1. Executive Summary

2. Market Analysis

3. Company Description

4. Organization and Management

5. Marketing and Sales Management

6. Products and Services

7. Financials

8. Appendix

A solid business plan is more than just a few paragraphs on what you want your business to be, it is a step by step plan for how to get there. Start by brainstorming and recording everything you know for each of these areas of your business. Then, identify where you need more information in order to complete the sections.

Finally, include a checklist or table at the end of each section that highlights the main components of the section and allows you to track how you’re performing in each area. Commit to reviewing the plan monthly – either on your own or with other management employees – to track your progress.

For more information on developing your business plan, visit: http://www.sba.gov/smallbusinessplanner/plan/writeabusinessplan/index.html

Preparing the Perfect Business Plan

The document referred to as a business plan is not optional; not if you want your business to be a success. Your business plan is essential to ensure that your business makes it past the starting line.

Your business plan should be realistic and working. It is a written document that describes the background of your business, your business objectives and target market as well as the financial forecast of your business. Your business plan has many functions and stands as the most important document that you will ever produce for your business.

The finished look and feel of your business plan should be detailed and produced to a high level of quality, even if your business plan is produced mainly for you, which brings me to my next point; the audience of your plan. It will be used mainly as the way of securing external funding for your business. Many potential investors may invest in your business ideas and work with you as well as lend you money as the result of the strength of your plan.

As well as the benefit of securing your business funding, your business plan allows you to see pitfalls before they happen, structures the financial side of your business effectively and focuses your development efforts as well as working as a measure of success.

Not only will your business plan be essential at the crucial start-up point of your business, it is also a living document that will need updating and changing as your business develops and grows. Regardless of whether you intend to use your business plan internally or as a document for external use, you should be honest and objective when looking at your business, not doing so will result in people having unrealistic expectations of what your business will be able to achieve.

Many people, over the course of your business development may request to see your business plan at some stage, such as; banks, external investors, grant providers and anyone interested in buying your business or becoming your business partner.

This written document of intent details how you’re going to develop your business, describing when this will take place and who will play a part in making it happen. Your plan allows you to focus your mind on how your new business will need to operate to give it the best chance of success.

Although there are no written rules as to the content, there is a standard structure of what type of content should be included, such as:

o An executive summary – an overview of your business. Many lenders and investors make judgments about your business based on this section of the plan alone.

o A short description of your business opportunity – who you are, what you plan to sell or offer, why and to whom.

o Your marketing and sales strategy – why you think people will buy what you want to sell and how you plan to sell to them.

o Your management team and personnel – your credentials and the people you plan to recruit to work with you.

o Your operations – your premises, production facilities, your management information systems and IT.

As well as the above you will also need to include a section within your business plan based on your financial forecast. This will be used to put everything that you have said about your business into numbers. It should be used to describe how much capital you will need to cover the start-up aspects of your business as well as where your revenue and income will be coming from. Your financial forecast should ideally cover the first three to five years of your business, with special emphasis on the first 12 months. This section is used to show the ‘thinking’ behind your business figures; the aim of it is to show that your business will have enough working capital to survive.

Every aspect of your business plan is important, right down to how you present it so make sure that you have everything covered and never leave details to chance.

Business Start-Up, How To Get It Right

All businesses go through some form of trial and error when they are first starting up but in order to avoid experiencing a large amount of trial and error it is important that you try and get things right first time around.

It is important to remember that one of the biggest causes of failure among new businesses is setting your sights to high and not researching your target market thoroughly. Never underestimate how helpful business planning can be.

In order to ensure that your new business has every chance of success you need to be dedicated and focused and able to structure your time most effectively. Business start up is an exciting time but don’t get caught up in the hype of it all. You need to keep your mind clear to enable you to make informed and good business choices that are done so purely to benefit your business.

There is a lot of planning involved in business start-up to give your new venture every chance of success. You need to have wrote your business plan and secured business finance before you can carry out the next stage of your business, such as buying your equipment or starting to employee staff; however before you can even do this you have to know what you are going to write within your business plan, meaning you need to start making business decisions as early as you can within your business start-up. Set out below are a few examples of just a handful of the considerations that you need to have sorted out before you can get your business off the ground:

Choose your Business Name

The name that you decide on for your business should reflect the nature of your business. Many people are tempted to stamp their individual personality into their business name, which should really be avoided. Your business isn’t a direct reflection of the person you are so therefore your name shouldn’t be. People’s names do not reflect the products or services that the business is providing meaning the name of the business should be one that makes customers aware of the type of business you are running. Remember first impressions count for a lot and believe it or not people may decide against using your business purely because of its name.

There are also certain words and expressions that you can’t use within your business name without official permission to do so. These words and expressions are ones that suggest national importance such as British, National, International and European. You also can’t use words or expressions that suggest special status such as; Association, Authority, Council, Institute or Society.

You’re Workplace Premises

When it comes to the property that you will base your business in you have the option of buying or renting, however by renting your business property it ties up less capital than buying does, meaning that you have more available capital to invest into your business. Renting also gives you the flexibility to move your business if you need to due to such factors such as your business has outgrown your current location or if you are trying to appeal to a wider range of customers.

Finding the right property to start up your business in is essential. You need a property that will help you operate effectively. If you rely on passing trade it is important that you are based in or near to a shopping centre. If customers use your business mainly over the phone or online then your location can be more flexible; you should however be in a good location for your employees to travel to, meaning that it should be near good transport links as well as being somewhere with good local facilities.