Why Write a Business Plan?
Why Write a Business Plan? Why should a business go through the trouble of developing business plans a business plan?
There are five major reasons: The process of putting a business plan together forces the person preparing the plan to look at the business in an objective developing business plans critical manner. It helps to focus ideas and serves as a feasibility study of the business's chances for success and growth.
The finished report serves as an operational tool to define the company's present status and future possibilities. It can help you manage the business and prepare you for success. It is a strong communication tool for your business. It defines your purpose, your competition, your management and personnel.
The process of constructing a business plan can be a strong reality check. The finished business plan provides the basis for your financing proposal. Planning is very important if a business is to survive. By taking an objective look at your business you can identify areas of weakness and strength.
You will realize needs that may have been overlooked, spot problems and nip them before they escalate, and establish plans to meet your business goals. The business plan is only useful if you use it.
Ninety percent of new businesses fail in the first two years. Failure is often attributed to a lack of planning. To enhance your success, use your plan! A comprehensive, well constructed business plan can prevent a business from a downward spiral.
Finally, your business plan provides the information needed to communicate with others.
This is especially true if you are seeking financing. A thorough business plan will have the information to serve as a financial proposal and should be accepted by most lenders.
Back to Outline II. Who Should Write the Business Plan? You, the owner of the business, should write the plan. It doesn't matter if you are using the business plan to seek financial resources or to evaluate future growth, define a mission, or provide guidance for running your business -- you are the one that knows the most about the business.
There are a number of software packages in addition to this article that can assist you in the formatting process: Consultants can be hired to assist you in the process of formulating a business plan, but in reality you must do a majority of the work.
Only you can come up with the financial data, the purpose of your business, the key employees, and management styles to mention a few items. You may still choose to use a consultant, but realize that you will still need to do most of the work, so why not tackle the plan yourself?
If you need further help in one area, then seek the assistance of the consultant. Business Plan Components The Executive Summary The first page of your business plan should be a persuasive summary that will entice a reader to take the plan seriously and read on.
The Executive Summary should follow the cover page, and not exceed two pages in length. The summary should include: A brief description of the company's history The company's objectives A brief description of the company's products or services The market the business will compete in A persuasive statement as to why and how the business will succeed, discussing the business's competitive advantage Projected growth for the company and the market A brief description of the key management team A description of funding requirements, including a time-line and how the funds will be used The Product or Service It is important for the reader to thoroughly understand your product offering or the services you currently provide or plan on providing.
However, it is important to explain this section in layman's terms to avoid confusion. Do not overwhelm the reader with technical explanations or industry jargon that he or she will not be familiar with. It is important to discuss the competitive advantage your product or service has over the competition.
Or, if you are entering a new market, you should answer why there is a need for your offering. If appropriate, discuss any patents, copyrights and trademarks the company currently owns or has recently applied for and discuss any confidential and non-disclosure protection the company has secured.A business plan is an important factor in successfully creating a business, and is often an essential part of qualifying for funding.
Business plans are written documents that describe and analyze your business, and provide detailed information about your short and long-term goals, your strategies for achieving those. Developing A Business Plan. Overview. The importance of planning should never be overlooked.
For a business to be successful and profitable, the owners and the managing directors must have a clear understanding of the firm's customers, strengths and competition. We would like to show you a description here but the site won’t allow us.
Bplans offers free business plan samples and templates, business planning resources, How-to articles, financial calculators, industry reports and entrepreneurship webinars. Developing Your Business Plan & Strategy.
Creating a Business Plan for a New or Existing Business. How to Structure a Service Business. Ramon Ray: The Smart Hustle Entrepreneur Business Plans: Who Reads Them and Why. Key Components of a Good Business Plan.
What Investors Want to See in Your Business Plan. Business plans Last Updated: 14 August The business planning section covers a broad range of information to help you start, run and grow your business.
Decide whether to use social media in your business and developing a social media strategy to help you connect with customers. Environmental, water and energy management.