What Is A Business Plan, And How Can One Help You?

WHAT IS A BUSINESS PLAN?

Business planning has had a bad rap! Think of it this way: if you don’t know where you’re going, any road will get you there. A business plan is a blueprint for success. It is a series of specific steps you map out as a path to reaching your business goals.

This doesn’t mean that the plan won’t change. However, if you keep your eyes on the prize (your vision), then the more specific you make your roadmap, the greater your chances of reaching your destination.

Business plans come in many sizes, ranging from the back of the napkin kind, to elaborate, multi-sectioned documents. All business plans answer the same fundamental questions.

• First, you must demonstrate how anyone in your business makes money. This shows your understanding of the fundamentals in your business.

• Second, you must show how you will improve on the current norm in your industry, by doing things faster, better, and smarter, and of course, making more money. This shows your market edge, or your “unique selling point.”

• Thirdly, for either yourself, or an outside investor, you must demonstrate “what’s in it for me?” This translates your dreams and vision into the hard facts of dollars and cents, and demonstrates that you will indeed make a profit, eventually.

Many times an entrepreneur begins with an idea that he/she believes in so strongly that they jump into production without testing the market. By taking the time to plan, you can avoid many of the pitfalls involved in this approach.

Investors also want to know about the background and experience of your management team. They want to know that when the going gets tough, you have the expertise and determination to go the distance.

A business plan is often organized into sections that highlight the main features of your business. A common format is:

• Executive Summary,
• Mission and Goals;
• Product Plan;
• Market Analysis;
• Market Strategy;
• Management Team, and
• Financial Strategy
• Appendices add detailed information.
HOW CAN A BUSINESS PLAN HELP YOU?

A business plan is written for two main purposes. One is to create the specific blueprint you need to make your company work. The second is to attract the outside capital you need for start-up and continued operations. In essence, the business plan becomes a marketing device to attract the money you need to be successful.

There are many other benefits of business planning. The most important is to gain the focus and clarity to know what to do on a daily basis. Planning can help you avoid mistakes by testing ideas on paper before you spend money on them in the field. Finally, a business plan creates a magnet for attracting other resources you need to be a success.