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Preparation of a business plan can be your most important
task in running a small business. It's hard work and some business owners are
reluctant to write a business plan because of the time and research involved.
However,
an existing business, even more than a start-up,
can benefit from a good, written plan.
The process of preparing a
business plan :
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- Aids
in the thought process
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- Functions
as an efficient communication tool
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- Allows
you to test the idea(s) on paper and get objective feedback
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- Provides
a yardstick to measure progress in the future
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Many people get stuck because they hate to write, the process is too time
consuming or they know what they want to say, but just can't seem to get it
down on paper.
Here are some strategies to
beat those problems:
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- Write
a little at a time - a few sentences is a great start. The most
important part is that you get your thoughts on paper and let someone
you trust read them. Sometimes a person not involved in the business
can be a source of very good ideas.
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- Don't
worry too much about format. The suggested format that follows is just
a starting point. A good business plan must contain certain elements
(the Executive Summary is a must), but the logic in the plan and
believable financial projections are the most important parts. If the
numbers don't work, no amount of beautiful presentation will make your
plan a good one!
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- Don't
write a book! Whenever possible use charts, tables and graphs to
present and analyze information. A picture is truly worth a thousand
words.
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In general, a good business
plan should answer to the following questions:
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- How
will you reach these customers?
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- What
is it that your customers want and how do you know this?
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- How
does your business provide customer wants?
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- Do
you know your business and how it should operate?
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- Do
you know your industry and the current trends in the market?
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- How
are you qualified to do what you want to accomplish?
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- Do
your assumptions make sense to someone unfamiliar with your business?
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- Are
your financial projections believable and do they make sense?
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- How
will you measure your progress financially and in other ways?
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- What
will you do to make it easy for people to do business with you?
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- What
differentiates your business from all the others in your industry?
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The single most important aspect of a good
business plan is that it must be based on your market and your customers'
desires. What you want, and think, as a business owner is much less important
than what your customers want and think. The reason for your business to
exist is to create and service customers.
The Key Parts of the Business
Plan:
You should have specific goals and develop realistic strategies to meet
those goals in a variety of areas: financial, business growth, market share,
employment goals, etc. Goals and Strategies will appear in your plan briefly
at the beginning and in the body of the business plan: both to express your
vision of future business and as the foundation of your financial
projections.
The Mission Statement -
You should answer the question: WHY are you in
business? Your mission should be a concise statement of the
primary goals of the business and how they will be achieved. Often it
reflects a personal philosophy.
Goals - Your goals are
concise statements of WHAT will your business set out to do and WHEN will the
goal be achieved. Goals are time based and measurable - most importantly,
goals must be achievable.
Strategies - The
strategies you use will show HOW will you meet your goals and WHO will be
responsible. Strategies tell the reader what method you will use to meet your
goals. You may have multiple strategies to reach a single goal and
strategies may overlap among goals.
Now, take another look at a sample Business Plan
Outline.
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