If you have ever considered or even dreamed of going into business for yourself, you've already engaged in some degree of business planning. Most likely your planning was intertwined with your thoughts about the personal issues that accompany a decision to start your own business.
In its most general sense, business planning is all about taking your dream and turning it into reality. A business plan is the document you create when you take an idea for a commercial endeavour and work through all the factors that will have an impact on the successful startup, operation, and management of the business. Smart entrepreneurs plan, not because accountants or business advisors tell them to, but because they understand that it increases their chances for success. Sure, there are successful businesses whose owners fly by the seat of their pants and never create a written plan. But they succeeded despite the lack of a formal plan, not because of it. How much better might they have done had their good ideas been coupled with some solid planning?
Those who have decided to embark on a new enterprise have probably already taken some steps, however informal, to confirm the viability of the new business. Creating a written plan is the next logical step in that process. For example, a business plan can be the vehicle that carries your new idea from the conceptual and planning phase down the road to the building and operational phases. Or, it may help to establish your business's credentials for purposes of obtaining bank financing or investment by future partners. A plan for an existing business may just deal with a single aspect of your business, such as a new product introduction and its impact on financial management and other ongoing operational issues. In this module we'll address your key questions about business plans, including:
- What can a business plan do for you?
Why go to the trouble of documenting what you know will work?
What events trigger the need to create or update a plan?
- Preparing to put the plan together
Do you know who your audience is?
How will you gather all the information that you need?
What should the plan look like?
- Writing the plan
How will you organize and present your plan?
What documents will you include, and what will each provide to a reader?
- Using the completed plan
How do real world results compare to the plan?
What do you do when things go wrong or the unexpected occurs?
- Business plan case studies
What would a sample plan for a manufacturing concern, a service provider, and a retailer look like?
Plan Your Work
The importance of a comprehensive, thoughtful business plan cannot be overemphasized. Much hinges on it: outside funding, credit from suppliers, management of your operation and finances, promotion and marketing of your business, and achievement of your goals and objectives.
Despite the critical importance of a business plan, many entrepreneurs drag their feet when it comes to preparing a written document. They argue that their marketplace changes too fast for a business plan to be useful or that they just don't have enough time. But just as a builder won't begin construction without a blueprint, eager business owners shouldn't rush into new ventures without a business plan.
Before you begin writing your business plan, consider four core questions:
- What service or product does your business provide and what needs does it fill?
- Who are the potential customers for your product or service and why will they purchase it from you?
- How will you reach your potential customers?
- Where will you get the financial resources to start your business?
Preparing to Write Your Business Plan
Physically putting a business plan together requires you to translate your thoughts about how you're going to run your business (and how it will perform) into a format that is dictated, in large part, by the business you're in and the expectations of your audience. While most business plans share a similar structure and contain similar information about a business, your business plan will be distinguished by those characteristics that are unique to your business. Just as each person's resume differs because it reflects the particular life experiences of that individual, each business plan will differ. But the format makes it instantly recognizable as a business plan.
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