Business Plan Article
1. What is a Business Plan?
A business plan is a written summary of everything you already know about your business and the industry it is in, and the future you expect to create with that business. A well-done businessplan is realistic, but conveys the energy and optimism you feel about your business's future. It is an opportunity to convince the world that your idea is worth the time, energy and money it will take to make it a reality. Make it compelling, exciting, but believable and understandable. A business plan shows what you have now in terms of resources like management talent and a great idea, and what it will take, step-by-step, to get you where you are going. Just think how different our lives would be if Microsoft and Amazon.com had not been created. How different will the world be if you plan well and create your business successfully?
2. When Do I Need a Business Plan and What Do I Want to Achieve Through the Business Planning Process?
If you are writing a business plan for management planning purposes, be specific about what goals you wish to achieve. Do you want to grow the business, create an exit strategy, and develop a new product?
For many, the purpose of business planning is to get funding for a start-up company or to grow an existing business by buying real estate, investing in equipment, creating a new product, or approaching a new market.
If you are writing a business plan to get funding, you need to create a statement about the purpose of the funding, and how you will pay back the loaned amount or grow the company, if the funding is through equity investors.
For a new business:
When you first think about starting a business and want to make sure your idea is realistic
To attract outside investors, to send to potential lenders, and to have ready to find Board of
Directors candidates or key employees.
To use as a base for more detailed tactical planning
To use as a starting point to change as you get more information or as conditions change
To track your progress against after you start your business
For an existing business:
When you decide to grow your business
When your technology or business environment changes
When you want to start selling a new product or service
When you want to start selling outside your current market
If you want to acquire another business
3. What are the benefits of doing a business plan?
Writing a business plan allows you to be sure you know everything you can about your business so you can most realistically assess your opportunities and risks in changing your operation or opening your business. It forces you to think through all the details that will be involved and find answers to problems before you spend money on them.
4. How long does it take to do a business plan?
That depends on what kind of business plan you decide to do and who your audience is. For a new business plan for investors or bankers- 20-30 pages, probably with projections for 3 years - this will take at least 40 hours to research and write, maybe more. A business plan for an existing business - can be more or less and may include recruiting and compensation data, and other operational reports. An existing business should allow 2-4 weeks for planning each year.
It can take longer to do a shorter business plan! The most-read business plans are not the longest ones, but the shorter ones where each word packs in a lot of meaning, and where the concept and meaning are clearest in the fewest words and simplest terms. You will need to gather a lot of data, but select only that information that helps build your case for the final plan.
5. I'm not a great writer. What is the best way for me to do a business plan?
You can have a professional write one for you. If you want to do it yourself, there are a lot of software products on the market, and web sites that can help you in Additional Resources at the end of this course. However, no matter what you choose, you must supply all the information
about your business, so the worksheets in this course are essential to help you decide what information should be a part of your business plan.
Writing or doing the preparation to write a business plan is an extremely important part of being prepared to open and run you own business. It forces you to think through all aspects before investing your time, energy and money. Even if you do write your own plan, be sure and have it
edited, critiqued and read by others who will give you an honest assessment. Most plans are still done on paper, but if your business is to be on the Internet, you might want to consider a plan done right on the web. Plans are also done in PowerPoint presentations, on video, or on audiocassettes depending on your audience. The same information should be presented, no matter what media it is delivered on.
Read answers 6-10 in Part 2.
Category: Personal Finance