A business plan is an essential roadmap for business success.
This living, breathing document generally projects 1 to 3 years ahead and outlines the Sales, Marketing and Financial Strategies that the company intends to undertake to maintain sales and grow revenues and profits.
Many people believe that a business plan is just for start- ups.
This is not true.
A business plan is for any business owner who is serious about taking their business to the next level. For the established business it’s an evaluation of where you are and where you want to be.
A well thought out business plan also helps you to look down on your business from 10,000 feet and to think about the key elements of your business. A business plan will help you to obtain financing for expansion, arrange strategic alliances, attract key employees, and boost your confidence. A business plan sells your company to the world and gives you direction as the world answers back.
It also helps you solidify your thoughts on your specific Products and Services and will clarify your thinking before you sit down with your bank or investors.
I am often amazed when I ask people about their business and they are unable to answer simple questions about their business.
I ask questions like:
- What is your mission Statement?
- Who is your target market?
- How much will your product cost?
- How many units do you need to sell to make a profit?
- How will you market your product?
I am usually answered with I don’t know!!!
Yikes!!!! This is a recipe for disaster.
The real value of doing a business plan is not having the finished product, but the process of research and thinking about your business in a systematic way.
The act of planning helps you to think things through thoroughly, study and research when you are not sure of the facts, and look at your ideas critically.
A business plan will help you clarify your goals and focus on defining every detail of your business opportunity. It takes time now, but avoids costly mistakes later.
It typically takes several weeks to complete a good plan. Most of that time is spent in research and re-thinking your ideas and assumptions.
But then, that is the value of the process. So make time to do the job properly. Those who do, never regret the effort.
A good business plan should include:
- a description of your business,
- the business and owner’s background information,
- the proposed resources to be used,
- the business strategy
- present trends on your business and the industry it will operate within,
- how your business will operate,
- who will manage and work within it,
- what other businesses operate in the same market/industry,
- how you will market/ sell your product or service,
- the results expected and finally
- a summary of its feasibility. (Executive Summary)
There are 9 key components to any business plan:
- Executive Summary
- Market analysis
- Competitive analysis
- Marketing and sales
Once you have covered all the areas of the business plan then you are ready to get serious about moving your business to the next stage.
Now it can be broken down into smaller pieces by achieving targeted goals in 90 day increments.