Business Planning
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Business Planning:
The importance of business planning:
A business plan is a very important and strategic tool for entrepreneurs. A good business plan not only?helps entrepreneurs focus on the specific steps necessary for them to make business ideas succeed, but it also helps them to achieve short-term and long-term objectives.
The characteristics of a great business plan:
The benefits of business plan:
A business plan?provides structure and defines business management objectives. It becomes a reference tool to keep the business on track with sales targets and operational milestones. When used properly and consulted regularly, it can help measure and manage your priority areas of focus.
The 3 main purpose of a business plan:
The 3 most important purposes of a business plan are 1)?to create an effective strategy for growth, 2) to determine your future financial needs, and 3) to attract investors (including angel investors and VC funding) and lenders.
The 4 types of business plans:
Business plans can be divided roughly into four distinct types. There are?very short plans, or miniplans, presentation plans or decks, working plans, and what-if plans. They each require very different amounts of labor and not always with proportionately different results.
The 7 steps of a business plan:
1. Executive summary
The executive summary is a condensed version of your full business plan. It captures the big picture, and it’s where readers will form a first impression of your company. It should include:
2. Company description
Explain the different elements of your business. Help readers quickly understand your goals, marketplace needs, how your products and services will meet those needs, and the competitive advantages of your business.
3. Market analysis
Show you are knowledgeable about the industry and the market in which your business will compete. Include your research findings and conclusions, such as:
4. Organization and management
Explain your company’s organizational structure and ownership, as well as management team backgrounds, qualifications and other pertinent information. Include the legal structure of your business (such as a C or S corporation, general or limited partnership, or a sole proprietorship).
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5. Service or product line
Emphasize how your business benefits customers and focus on why your particular service or product will fill a need for your target customers.
6. Marketing and sales
Define your marketing strategy, which should be unique to your company and evaluated on an ongoing basis. Also explain how you will sell your product and include any sales strategies you have in place.
7. Contingency plan
Document how you will deal with some of the good and bad situations that come with running a business by answering questions such as:
If you’re in need of funding, you may create an eighth section that focuses on the amount of money you need, why you need it and how it will be used. In this section, you should also provide past and prospective financial information to support your request, as well as a demonstration of your own personal ability to repay loans if your business cannot.
Another Steps for Business Plan:
If your company is going to run a viable business plan and investors are going to put their money into it, your information has to be top notch. And that includes?knowing every topic involved, not just your internal operations. Research and critical analysis are key to developing and communicating a business plan properly. The information used has to be relevant, valuable, and objective. However, you’re not writing a novel, so the presentation also needs to be concise. That means choosing the right research to include versus just a brain dump of anything about the company’s situation.
What is your business plan being written for? A road map on how to operate? An investor or loan pitch? Both? A historical document? The purpose has to be clear and definitive. If you don’t know why you’re writing a business plan, the effort will be a waste of time. Knowing also means having a target audience you expect the plan to be ready by. With both defined, it will help dictate what information is included and how.
Some people call it a company profile, others a snapshot. Either way, your business plan needs a section that gives a reader a clear view of what your company is, does and provides in a few paragraphs. This should be the same information that one would find if they looked on the business’ website. It’s designed to be quick and digestible mentally because it needs to stick in a reader’s mind quickly, especially as more information is provided later in the plan. If the reader remembers nothing else, he or she will have the profile well entrenched in memory. And that matters when your plan is being considered with others.
Some folks write their business plan to only highlight what they think are the selling points and good features of their venture. That’s a mistake. Most readers have a pretty good idea where the company sits in the big picture. Detail the company’s status in full, good and bad. And where there are weaknesses, include plans on how they will be addressed given the right support. Details should also include key features like patents, licenses, copyrights and unique strengths no one else has.
A simple mistake made by most startups is that people think they can write a business plan without knowing first?how something is going to be sold. A strategic marketing plan is essential; it shows how your product or service is going to be delivered, communicated and sold to customers. It covers where, when and how much, all the key pieces that later on feed into the financial statement projections in the business plan. No surprise, marketing has to be nailed down before planning out the rest of the business.
Another common mistake folks often make is writing only one business plan. The document given to a lender is going to be very different than the one for internal direction. Smart startups have multiple versions, just like candidates have multiple resumes for different prospective employers. Match the plan and message to the audience you are addressing.
This is the most important piece in a successful plan – your motivation and goals. Why are you going through all this effort, work, sweat and effort? Your motivation needs to be a reason that will convince people the business will succeed, through thick and thin. A business needs a mission that drives it, not just selling to make money. Your motivation defined in the business plan is that mission.
Here's what you need to know to get started.
1.Make sure your company has a clear objective. 2.Identify your target market.3.Analyze your competition. 4.Budget accordingly. 5.Identify your goals and financial projections. 6.Clearly define the power structure. 7.Discuss your marketing plan. 8.Keep it short and professional.
Conclusion of a Business Plan:
A business plan conclusion is?a summary of a business plan's strengths designed to convince the reader of the company's success. Because companies typically create business plans to get funding or investors, the conclusion should focus on how the organization makes money and why it is a good investment.
Ref: 1.education.bankerstrust.com 2. Google 3.Business Plans Index (Carnegie Library of Pittsburgh).