Preparation of a business plan can be your most important task in running a small business.
Its hard work and some business owners are reluctant to write a business plan because of the time and research involved.
Many small business owners don't realize the need for a written plan because they say, “I know what I'm doing” or " I've been in business for years.”
The steps to preparing a business plan:
1. Aids in the thought process
2. Functions as an efficient communication tool
3. Allow you to test the idea(s) on paper and get objective feedback
4. Provides a yardstick to measure progress in the future.
Many people get stuck because they hate to write, the process is too time consuming or they know what they want to say, but just can't seem to get it down on paper.
Here are some ideas to help you with these problems:1. Write a little at a time - a few sentences are a great start.
The most important part is that you get your thoughts on paper and let someone you trust, read them.
Sometimes a person not involved in the business can be a source of very good ideas.
2. Don't worry too much about format. The suggested format that follows is just a starting point.
A good business plan must contain certain elements (the Executive Summary is a must), but the logic in the plan and believable financial projections are the most important parts.
If the numbers don't work, no amount of beautiful presentation will make your plan a good one!
3. Don't write a book! Whenever possible use charts, tables and graphs to present and analyze information.
A picture is truly worth a thousand words. In general, a good business plan should answer to the following questions:
1. Who are your customers?
2. How will you reach these customers?
3. What is it that your customers want and how do you know this?
4. How does your business provide customer wants?
5. Do you know your business and how it should operate?
6. Do you know your industry and the current trends in the market?
7. How are you qualified to do what you want to accomplish?
8. Do your assumptions make sense to someone unfamiliar with your business?
9. Are your financial projections believable and do they make sense?
10. How will you measure your progress financially and in other ways?
11. What will you do to make it easy for people to do business with you?
12. What differentiates your business from all the others in your industry?
The single most important aspect of a good business plan is that it must be based on your market and your customers' desires.
What you want, and think, as a business owner is much less important than what your customers want and think.
The reason for your business to exist is to create and service customers.
The Key Parts of the Business Plan:
You should have specific goals and develop realistic strategies to meet those goals in a variety of areas:
financial, business growth, market share, employment goals, etc.
Goals and Strategies will appear in your plan briefly at the beginning and in the body of the business plan: both to express your vision of future business and as the foundation of your financial projections.
The Mission Statement - You should answer the question:
WHY are you in business?
Your mission should be a concise statement of the primary goals of the business and how they will be achieved. Often it reflects a personal philosophy.
Goals - Your goals are concise statements of WHAT will your business set out to do and WHEN will the goal be achieved.
Goals are time based and measurable - most importantly, goals must be achievable.
Strategies - The strategies you use will show HOW will you meet your goals and WHO will be responsible.
Strategies tell the reader what method you will use to meet your goals.
You may have multiple strategies to reach a single goal and strategies may overlap among goals.
This concludes Developing A Good Business Plan.
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Ida Mae Boyd
609-641-6594
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