Every business begins with an idea. Turning that idea into a profit-making business takes exhaustive planning. Once the business opens its door, you will be inundated by the details, problems, challenges and joys of going it alone. So whatever the business, a prospective owner should take the time to formulate a comprehensive business plan. The more time spent planning will have a multiplier effect in how soon you become profitable.
A business plan is a written document that identifies the who, what, when, where, how much, why and how of your proposed venture. When you write the business plan it is important to be specific, factual and objective. A plan is often thought of as only an exercise to borrow money. However, it should be such a detailed document that you continue to use and revise it throughout the life of the business.
A well-written business plan has at least five major benefits. You will discover additional benefits as you make use of your plan.
1. The process of putting a business plan together forces you to take an objective and critical look at your business in its entirety.
2. A business plan provides you with a map to follow. The plan is formulated by analyzing the strengths, weaknesses, challenges and opportunities that will eventually affect your business.
3. A well-written plan makes it easier for your banker, attorney and accountant to understand your concept of the business. They can assist you more effectively with this understanding.
4. A business plan serves as a communication tool when you need to inform your prospective employees, suppliers and others about your operation.
5. A business plan can help you develop as a manager by giving you practice at evaluating all the variables. Over a period of time, this will help you set new objectives and provide a method to evaluate your goals.
Most business plans have three basic components. They begin with a general overview of the business, then discuss how the business will identify customers and generate sales. They conclude with financial projections that indicate the level of profit the business expects to make in its first few years of operation.
A cover page completes the package, providing the business' name and the principal owner's name, address and telephone number. It includes a statement of purpose for the plan (business or financial proposal) and to whom the plan will be submitted.
After completing the business plan, you will write an Executive Summary, which reflects the findings of your research. It profiles the proposed business' competitive advantage, its projected rate of growth, how it will be financed and the anticipated return to the owner. The summary will precede the business plan and should be one or two pages in length. If your summary reflects a solid business proposal, the reader will be persuaded to review the entire business plan.
A Table of Contents should follow the Executive Summary to give the reader immediate access to a particular section of the business plan.
Outline For The Business Plan
The following outline can be used as a guide when writing your business plan, a process which may take several months. A plan based on this outline is suitable to present to an investor or loan officer and can be expanded to reflect the growth of your business enterprise. Since this whole book serves as an outline for a business plan, the major contents will be the results of your work in preparing each chapter.
Describe the nature of the business and the target market
Define the product or service offered
Why it will be successful -- what are the experiences and skills that the owner(s) brings to this new business?
5. Objectives and goals
6. Keys to success
7. Product/Service
8. Market Research (done to support the feasibility)
9. Location
10. Legal
11. Financial (projections)
12. Funding
13. Marketing
14. Summary
Your business plan should be a living document, referred to regularly, and revised to reflect your experience. Begin a plan that expands this first year into a plan that spans three to five years into the future. Update the business plan at regular intervals. Set your goals and work toward them. Remember, enthusiasm is no substitute for reality and planning.
