When starting a business, a solid business plan can help you secure financing and win those crucial first customers. It can be your best asset, but a faulty business plan can create obstacles that could derail your new business before it has a chance to succeed.
Why is a business plan important?
A business plan is a living document that describes how your business is constructed. It is very important, especially for a new business, because it:
•Helps you get a clear picture of each segment of your business.
•Allows you to see opportunities and take advantage of them; or, perhaps more importantly, to spot possible pitfalls and avoid them.
•Enables you to get expert opinions and make revisions, as needed, before applying for loans, hiring employees, choosing facilities, or making other major financial decisions.
What's in a business plan?
A good business plan should focus on the following factors:
•People -- Who will be your employees, suppliers, or outside advisors? Who are your potential customers?
•Opportunity -- What are your products/services, and who will buy them?
How much can your business expect to grow? What obstacles do you face?
•External Factors -- What are the "macro" trends that can affect your business -- such as the economy, regulations, and industry trends?
•Risk -- What are the potential pitfalls of your business plan, and how can they be overcome?
Creating a business plan, step by step.
When creating a business plan, there are many overlapping tasks to handle. So organize a schedule to get them done.
•Step 1 -- Gather and review all the research and information on your target marketplace and industry.
•Step 2 -- Ensure that you have up to date financial data on prices, estimates, and goals.
•Step 3 -- Edit the business plan to make sure that the various sections of the plan are interconnected.
•Step 4 -- Invite informed, experienced business experts to review your business plan.
•Step 5 -- Make revisions, taking into consideration your expert reviewers' recommendations.
With a clear vision for your business and this basic information about business plans, you're ready to start writing. Read Get Started: 10 Steps to Writing a Business Plan to understand the common components of a business plan, and get started writing today!
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