05/15/2012 06:06 pm ET Updated Jul 15, 2012

Business Plan Basics: Get Your Business on Track

For Women & Co. by Citibank's Small Business Resource Center

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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