A popular adage says that “When you fail to plan, you plan to fail.” This saying is especially important when thinking of venturing into a new business. Entering a business is not just a walk in the park. Before you can get your hands on some nice cash, you first need to address a lot of problems and take a lot of risks.
These problems and risks, however, will be a lot easy to face with some foresight. Planning is crucial in any venture– be it small-scale or big time. Of course, it always helps to put everything you want to attain with your enterprise into writing. For this purpose, you need to come up with a business plan.
The first logical question to ask is, “What is a business plan?” Basically, it is a formal document that enumerates all your goals for your business, why you think these goals are attainable, and how your resources are allocated towards the achievement of your goal. Simply put, it acts like a blue print for your business venture. It also states possible problems the enterprise may counter, and how the people behind the business plan to address them.
These formal documents are usually done for two general types of audiences: external and internal. Externally focused business plans cater to individuals outside of the company, such as investors and customers. These external stakeholders need to know as much as they can about the business, and the people behind it, so the business plan must be easy to understand and very comprehensive.
Internally focused business plans, meanwhile, are for the use of people who actually have a hand in running the business. Because of this, this document usually states internal goals and the means by which they can be achieved. This business plan also commonly draws up a list of critical success factors, or non-financial measures by which one can determine if the business is doing well.
Before writing a business plan, certain things have to be really clear in your mind. First of all, you have to be able to identify your objectives. Think of how you want your company to turn out five years from now. This is the time to be quite ambitious and go big with your dreams, but remember to still be realistic and practical. The objectives you will jot down here will serve as your guide in the future, so be careful in determining them.
Second and also equally important is the determination of your financing goals. Identify how much money you have and how much money you still need. Be very, very clear with the source of your funding, because money, whether we like it or not, is the fuel that will keep your business running. Meticulously crunch the numbers to avoid any future financial problems.
Once you have settled all these things, the next question will be: “How do I write a simple business plan?” Well, making a business plan generally entails the inclusion of major components in the document. First, you have to present brief descriptions of the business and the company behind it. In describing the industry, present an accurate take on the current status of the company, as well as outlooks for the future. Make sure that all these descriptions are backed with relevant statistics. Sources should be cited as much as possible. Also mention the structure and focus of the business— whether it is concerned with food, manufacturing, wholesale, retail or the provision of services.
In creating business plan, you also need to describe the product or service you plan to offer. Give the reader a clear picture of what you want to give them. Focus on the unique features and benefits your product or service can offer potential customers.
Next, you need to come up with a market analysis. You need to carefully dissect your target market. Determine relevant information such as size, structure, growth prospects and sales potential. A comprehensive market analysis will allow you to properly establish pricing, distribution and promotional strategies, which are crucial to make your business profitable and cost-effective.
Also include a competitive analysis in your business plan. This part of the plan scrutinizes competing businesses, particularly their strengths and weaknesses. Once you know your competitors well, you can already draw up strategies to have an edge over them. You can also craft ways by which you can prevent competition from penetrating your target market.
Another major component that needs to be in your business plan is a detailed account on operations and management of the company. This part delves on the logistical plan for the organization, including division of labor among the departments and individuals in the management team, and capital and expenses needed to properly operate the business.
After you’ve finished building up the contents of your business plan, you also need to write an executive summary of the document. As the name suggests, the executive summary provides an overview of your plan. Keep the summary clear and concise, giving the reader direct information on what he or she wants to know. Use a businesslike language in your synopsis. Include the business concept, financial features and requirements, current business status, and major achievements.
Although developing a business plan seems to be a daunting task, you can always get some help online. There are a lot of free fill-in-the-blank templates that you can download and access over the Internet which can provide a useful guide in making your plan. This will also allow you to save you time in writing, since an outline is already provided from which you can start from.
If you want results for your business, then you should really invest time to make a comprehensive and well-thought-out business plan. It allows you to foresee threats, assess your current situation and set goals for the future. After all, the best weapon you can have against potential problems and setbacks to your enterprise is can be summed up in just one word: planning.