A business plan is a document that outlines the “who, what, when, where, why and how” of your business. It allows the company to gather pertinent information, look ahead, prepare resources and most importantly, raise capital.
Your plan will help guide you through setting up your business and stay on a clear path.
Why do I need one?
Now granted, there are many entrepreneurs that have successfully opened up shop without the use of a plan. The funding may have come from family and friends, they took a sinking company and turned it around or they knew what their direction was and didn’t need to look back. However, in most cases a plan is a viable resource for your business.
– You think you know but you don’t know. In other words, you may have outlined the entire business in your head but when you put pen to paper you realize there are things you’ve missed, items that haven’t been accounted for, or worse, you didn’t even have an initial plan of action.
– You wouldn’t go in to an investing office without it. If you are looking to raise capital for your business you are going to need a solid business plan to present to an investor. They will use this along with many other factors to determine whether your proposal is viable. Their main goal is not to lose money, so they won’t gamble. Having a strong business plan will help you secure the funding needed to start your business.
– It’s your roadmap. Briefly discussed above, your business plan will be your roadmap to success. It will help guide you through the start-up stages and even further in preventing the least number of hiccups possible. You should keep your business plan handy so you can look back at it and keep on the right path.
What makes a great plan?
Before writing your business plan, you might want to take a look at some of the key factors of a great business plan. Understanding these key elements will save you time and effort in the end. You can focus on these during your writing instead of having to go back and edit in the end.
– What is the basic concept? Write it down.
– Gather all of the information possible prior to writing your business plan.
– Review sample plans. Read them. Understand them. Why do you think they include the information they do?
– Don’t overdo it. Keep things simple and straightforward. Your business plan isn’t a tool to showcase your knowledge of the business.
What are the do’s and don’ts of a business plan?
Okay. We are almost there. But first lets address some of the more common do’s and don’ts of business plans. Again, keeping these in mind will save time and effort in the long run.
Do answer the who, what, when, where, why and how in your business plan.
Do understand that planning is a critical step in a successful business.
Do keep the business plan clear, straightforward and to the point.
Do explain your experience and how it will benefit the company.
Do consider your competition.
Do address the strengths and weaknesses of your business.
Do spell-check.