Business plan is a necessity
Turning a dream business into reality is easier than you think – with the right planning. Your business planning should begin with developing a comprehensive, detailed business plan that describes what the business is and what its products or services are, a market analysis and strategy and any financial objectives. This plan should be developed before the state of your operation, no matter what type of business you’re in. The more thorough and in-depth your plan is, the greater your chances are for success.
A plan is, in essence, a blueprint that states your goals and objectives and helps financial sources and suppliers to understand your direction and focus. Use the following steps as guidelines for writing your business plan:
- Define your product: What is it? Why is it special? What will it need: How does it relate to similar products on the market?
- Establish a planning format: Construct a one-year strategic plan, followed by a long-range three- to five-year plan.
- Define your market position: What are the current economic, competitive and political realities of your market? How about timing? Is there a need for your product? Who are you serving? Don’t forget distribution. How will the product reach its market?
- Set goals: Where do you want to go? Write down profitability, development and marketing objectives.
- Do a market study: Size up that competition. Find out who the direct and indirect competitors are. What are their strengths and weaknesses? Look at past events. Research trade journals, newspapers, chambers of commerce and government agencies. Find out as much information as you can about the market including future projections. Look at this dispassionately to make sound business decisions. If you don’t feel qualified to handle the research, hire a consultant or research agency. It’s worth the expense in the long run.
- Formulate strategies: What must you do to get from here to there? Financing is primary. List detailed start-up costs, operating expenses, a projected operating statement, do a cash flow projection and start a balance sheet. Financial statements are of utmost importance because most businesses fail within the first year due to under-capitalization. If you plan for expenses, you’re already ahead of the game. Plus, thorough records improve your chances of receiving financial backing. Strategizing also includes putting together the best management team, if plan on hiring employees. You need to hire the most qualified individuals for your needs and you need to delegate. Everyone’s individual strengths create a more powerful and successful business.
- Set timetables: List what needs to be done, including dates and projected completion. Stick to this guide as much as possible. Do have a contingency plan ready for unexpected delays or problems.
- Implementation and control: Set up control procedures and tolerance points. Determine the work methods that will be most effective for you and your business.
- Review and recheck: Go over everything you have written so far and fine tune, if necessary. Don’t worry if you don’t think it’s perfect. Fear is normal when it comes to business. Just do the best you can and, if your business plan is rejected, find out why. Listen to the answer. You may have missed valid points.