The Business Plan: Your Map to Success
Published: 2007-04-09
Written by: Leanne Beattie
You wouldn’t take a vacation without planning ahead, would you? Of course not. You’d research flights, hotels and restaurants long before you left for your trip. So why would you even consider starting a business without a plan?
A business plan precisely defines your business, identifies your goals and serves as your anchor when your business finally starts taking off. Many entrepreneurs avoid writing a business plan because they think it’s too difficult, but in reality, you can make your plan as simple or as complex as you like. A business plan is a fluid document, always changing and growing-so what you put in it today doesn’t have to stay there forever.
Writing a business plan is the best way to nail down exactly it is that you want your business to accomplish. It defines what service or product you’ll provide and shows who your potential customers might be. And if you need funding for your business, either from a bank or from a venture capitalist, a well-prepared business plan that outlines your financial potential is absolutely necessary.
A basic business plan can be divided into four key sections: the description of your business; marketing; finances; and management. Once these four basics are covered you can go ahead and flesh out the plan with any further information that you like. There are no hard and fast rules about what has to be included-as a personalized document you can make it as complex as you like. However, if you will be using it to get funding from an outside source, a detailed financial forecast must be a core part. You must prove to investors that your idea can make money.
Your business description is the backbone of the whole business plan-it clarifies exactly what it is you wish to accomplish. Here you provide a detailed description of your product, your service and your target market. It should also include what makes your business special and how you will run your business on a daily basis.
Marketing you business takes thought and preparation-the marketing section of your business plan will lay these plans out on the line. This is where you learn about your customers, their likes, their dislikes and their needs. Researching your ideal customer allows you to develop a successful marketing strategy. You should also take the time to learn all about your competition so you can avoid their mistakes and build upon their good points.
Next comes the nitty gritty stuff-the financial information. This includes such things as budgeting, sales forecasts, break-even analysis and cash flow projections. This is the section your bank will go over with a fine-tooth comb when you apply for a loan, so you must spell out exactly how much cash you need to earn in order to turn a profit and how long it will take to get there.
Your management profile details the most important part of your business-the people. This is where you sell yourself to investors. If you don’t have a particular skill that’s needed to run your business, be honest and say so. Then put a plan in place to get someone on board who has the skills and talents you’re lacking. It’s better to be honest about your shortfalls from the beginning then trying to cover up any misconceptions down the road.
A thorough business plan is the best way to show bankers and other investors that you deserve their financial help. Prove that you have what it takes to make the business a success by planning ahead and knowing your business inside and out. Even if you won’t be using your business plan to get financial backing, you still need one to keep your own mind on track and heading in the right direction. You know what they say…if you fail to plan, you plan to fail!
About the Author
Leanne Beattie has over 12 years of marketing and communications experience in the high-tech industry, from software to laser technology. She is the owner of New Century Communications, an independent marketing firm specializing in small business promotion.
A ‘learn by doing’ entrepreneur, Leanne understands the struggles facing today’s small business owners and helps companies develop the marketing strategies needed to succeed in a global economy.
A firm believer that sales can’t happen until the marketing is done, Leanne turns marketing into money. From developing marketing plans to copywriting and public relations, Leanne helps small businesses stand out from the crowd.