Thinking about starting a business ? Great. Have you got a Plan? That's Plan with a capital "P" for Business Plan . If you haven't written your plan yet, your business is still in the fantasy stages.
That isn't harsh; it's how it is in the real world. A company's business plan is what lenders such as banks and
the U.S. Small Business Administration use in deciding to lend you money. It's the main company document that your employees -- and you -- use to gauge your company's success and to make decisions about what you should do first, second, or not at all.
If you're starting a home-based business on a shoestring, some of
Business Planning
Writing a business plan can seem a daunting challenge. However, this skill is a vital requirement for any entrepreneur or business seeking to increase their chances of survival. Here is a list of my top ten tips for writing that winning plan:
1. Write from the audience’s perspective
The starting point for any business plan should be the perspective of the audience. What is the purpose of the plan? Is it to secure funding? Is it to communicate the future plans for the company? The writer should tailor the plan for different audiences, as they will each have very specific requirements. For example, a potential investor will seek clear explanations detailing the proposed return on their investment and time frames for getting their money back.
2. Research the market thoroughly
The recent Dragons’ Den series on BBC 2 reiterated the importance prospective investors place on knowledge of the market and the need for entrepreneurs to thoroughly research their market. The entrepreneur should undertake market research and ensure that the plan includes reference to the market size, its predicted growth path and how they will gain access to this market. A plan for an Internet café will consider the local population, Internet penetration rates, predictions about whether it is likely to grow or decline, etc., concluding with a review of the competitive environment.
3. Understand the competition
An integral component to understanding any business environment is understanding the competition, both its nature and the bases for competition within the industry. Is it a particularly competitive environment, or one that lacks competition? How are the incumbents competing—is there a price leader evident? Finally, including a thorough understanding of the bases on which you intend to compete is vital; can you compete effectively with the existing players?
4. Attention to detail
Make the plan concise, but include enough detail to ensure the reader has sufficient information to make informed decisions. Given that the plan’s writer usually has a significant role to play in the running of the business, the plan should reflect a sense of professionalism, with no spelling mistakes, realistic assumptions, credible projections and accurate content. The writer should also consider the format of the plan, e.g., if a business plan presentation is required, a back-up PowerPoint presentation should be created.
5. Focus on the opportunity
If you are seeking investment in your business, it is important to clearly describe the investment opportunity. Why would the investor be better off investing in your business rather than leaving money in a bank account, shares, or investing in another business? What is the Unique Selling Proposition (USP) for the business? Why will people part with their cash to buy from you?
6. Ensure all key areas are covered in the plan
Undertake research on what a business plan should contain; one good place to find this is at Bplans . Include sections on the Company, Product/Service, Market, Competition, Management Team, Marketing, Operations and Financials. The plan should also take on board the readers’ various preferences for viewing data. While many plans are predominantly textual, the plan should include some simple colour charts and spreadsheets.
7. Do the sums
The numbers will be subject to particular scrutiny. Costs should be documented in full and sales predictions should be both conservative and realistic. While costs are more certain and predictable, a crucial factor in the success or failure of the business will be the level of sales. If you are not particularly comfortable with maths, have someone assist you in preparing a simple cash flow and break-even chart. This will help the reader understand how many sales you must make to cover your costs, and also how much financing you must raise to start up successfully. Remember, at the beginning, there are a lot of start-up expenses in a period of uncertain sales volumes. If sales are on credit (including via credit card) it may take up to four weeks for you to receive the cash.
8. Executive Summary
Arguably the most important component of the plan is the Executive Summary. This is a summary of the entire plan and is usually contained at the start of the plan. It also tends to act as a key qualifier for time-pressed investors—if they like it, they will read on, if not they will go no further. It should be completed at the very end of the business planning process and should have a “wow factor” that entices them to read further. In tandem with this, the writer should also prepare a short “elevator pitch,” a five-minute overview of the key benefits of the new product/service.
9. Review process
Once you have completed your plan, have it independently reviewed. Select someone detached from the process who can offer constructive criticism on all aspects of the plan. Your local Business Link or Enterprise Agency should be able to assist with this. This review should prompt further questions that will need to be addressed in a revised draft.
10. Implement the plan
Finally, a plan should always be viewed as a living document and contain specifics regarding dates, deadlines and specific responsibilities. It should be constantly reviewed and updated, as well as being used in regular “plan versus actual” discussions. Business relies heavily on people taking actions and being accountable for them. A winning business plan will help to ensure that the business is fully focused on what is required to achieve the company’s goals.
Saturday, 9 January 2010
Friday, 8 January 2010
IMPORTANCE OF A GOOD BUSINESS PLAN
Your business plan is your company's calling card. It allows you to see your business through your investor's eyes. As the name suggests it is a plan of your business; your communication tool; selling your marketing, sales and operations.
Every time you meet with a property manager about leasing space for your business or you have a meeting with a potential lender/investor it is your business plan that will do most of the talking.
Use your business plan to present your business concept in away others can understand. You should focus on exactly what you want to achieve, where you want your business to go and how you plan to get it there. Projected sales and monthly expenses will also be included in your plan. All of this information will influence your choices, including the type of location you will be looking for. Your business plan will monitor whether you are achieving these objectives and maximise your changes of success by allowing you to keep adding to it.
A business plan is the key to long term success for new and old businesses. Your business must have a foundation to start from and you have to give your business time as success will take longer then merely weeks.
If you're a new retail business you should think about things such as will you have a walk in store? A catalogue? Will your store have an internet site? Will it enable Internet ordering? What will your delivery methods be? You should also think about who your competition is and how you are better than your competition.
Your business plan will:
• Help clarify/focus and research your businesses development and prospects.
• Provides a considered and logical framework within which a business can develop and pursue business strategies not just for the near future but throughout your business
• Serves as a basis for discussion with third parties such as shareholders, agencies, banks, investors etc.
• Offers a benchmark against which actual performance can be measured and reviewed.
Your business plan is a framework which your business must operate within. It will ultimately determine whether your business succeeds or fails. For management or entrepreneurs seeking external support, the plan is the most important sales document that they are ever likely to produce. It acts as the key to raising finance. Preparation of a comprehensive plan will not guarantee success in raising funds or mobilizing support, but having no plan at all will more than likely result in failure.
Some of the things that are worth thinking about before you start writing your business plan are:
• Clearly defining your target audience
• Determine your businesses requirements in relation to the contents and levels of detail
• Map out your plan's structure
• Decide on the likely length of your plan
• Identify all the main issues to be addressed within your plan
For many people the mere process of planning, thinking, discussing, researching and analysing can often be just, if not, more helpful than the actual outcome, which is your plan.
No businesses are the same, just as no plans are the same. Your business plan might seem like a daunting task but the results it will produce will be worth it and if you are having trouble writing the plan yourself there are many websites that offer help and, along with your help, will actually write the business plan for you.
Every time you meet with a property manager about leasing space for your business or you have a meeting with a potential lender/investor it is your business plan that will do most of the talking.
Use your business plan to present your business concept in away others can understand. You should focus on exactly what you want to achieve, where you want your business to go and how you plan to get it there. Projected sales and monthly expenses will also be included in your plan. All of this information will influence your choices, including the type of location you will be looking for. Your business plan will monitor whether you are achieving these objectives and maximise your changes of success by allowing you to keep adding to it.
A business plan is the key to long term success for new and old businesses. Your business must have a foundation to start from and you have to give your business time as success will take longer then merely weeks.
If you're a new retail business you should think about things such as will you have a walk in store? A catalogue? Will your store have an internet site? Will it enable Internet ordering? What will your delivery methods be? You should also think about who your competition is and how you are better than your competition.
Your business plan will:
• Help clarify/focus and research your businesses development and prospects.
• Provides a considered and logical framework within which a business can develop and pursue business strategies not just for the near future but throughout your business
• Serves as a basis for discussion with third parties such as shareholders, agencies, banks, investors etc.
• Offers a benchmark against which actual performance can be measured and reviewed.
Your business plan is a framework which your business must operate within. It will ultimately determine whether your business succeeds or fails. For management or entrepreneurs seeking external support, the plan is the most important sales document that they are ever likely to produce. It acts as the key to raising finance. Preparation of a comprehensive plan will not guarantee success in raising funds or mobilizing support, but having no plan at all will more than likely result in failure.
Some of the things that are worth thinking about before you start writing your business plan are:
• Clearly defining your target audience
• Determine your businesses requirements in relation to the contents and levels of detail
• Map out your plan's structure
• Decide on the likely length of your plan
• Identify all the main issues to be addressed within your plan
For many people the mere process of planning, thinking, discussing, researching and analysing can often be just, if not, more helpful than the actual outcome, which is your plan.
No businesses are the same, just as no plans are the same. Your business plan might seem like a daunting task but the results it will produce will be worth it and if you are having trouble writing the plan yourself there are many websites that offer help and, along with your help, will actually write the business plan for you.
Thursday, 7 January 2010
GOOD BUSINESS PLAN
What factors are involved in creating a good business plan? Is it the length of the plan? The information it covers? How well it’s written, or the brilliance of its strategy. No.
The following illustration shows a business plan as part of a process. You can think about the good or bad of a plan as the plan itself, measuring its value by its contents. There are some qualities in a plan that make it more likely to create results, and these are important. However, it is even better to see the plan as part of the whole process of results, because even a great plan is wasted if nobody follows it.
Planning is a process, not just a plan
A business plan will be hard to implement unless it is simple, specific, realistic and complete. Even if it is all these things, a good plan will need someone to follow up and check on it. The plan depends on the human elements around it, particularly the process of commitment and involvement, and the tracking and follow-up that comes afterward.
Successful implementation starts with a good plan. There are elements that will make a plan more likely to be successfully implemented. Some of the clues to implementation include:
1. Is the plan simple? Is it easy to understand and to act on? Does it communicate its contents easily and practically?
2. Is the plan specific? Are its objectives concrete and measurable? Does it include specific actions and activities, each with specific dates of completion, specific persons responsible and specific budgets?
3. Is the plan realistic? Are the sales goals, expense budgets, and milestone dates realistic? Nothing stifles implementation like unrealistic goals.
4. Is the plan complete? Does it include all the necessary elements? Requirements of a business plan vary, depending on the context. There is no guarantee, however, that the plan will work if it doesn’t cover the main bases.
Uses of business plans
Too many people think of business plans as something you do to start a company, apply for a loan, or find investors. Yes, they are vital for those purposes, but there’s a lot more to it.
Preparing a business plan is an organized, logical way to look at all of the important aspects of a business. First, decide what you will use the plan for, such as to:
* Define and fix objectives, and programs to achieve those objectives.
* Create regular business review and course correction.
* Define a new business.
* Support a loan application.
* Define agreements between partners.
* Set a value on a business for sale or legal purposes.
* Evaluate a new product line, promotion, or expansion.
No time to plan? A common misconception
“Not enough time for a plan,” business people say. “I can’t plan. I’m too busy getting things done.” A business plan now can save time and stress later.
Too many businesses make business plans only when they have to. Unless a bank or investors want to look at a business plan, there isn’t likely to be a plan written. The busier you are, the more you need to plan. If you are always putting out fires, you should build fire breaks or a sprinkler system. You can lose the whole forest for too much attention to the individual trees.
Keys to better business plans
* Use a bussiness plan to set concrete goals, responsibilities, and deadlines to guide your business.
* A good business plan assigns tasks to people or departments and sets milestones and deadlines for tracking implementation.
* A practical business plan includes 10 parts implementation for every one part strategy.
* As part of the implementation of a business plan, it should provide a forum for regular review and course corrections.
* Good business plans are practical.
Business plan “don’ts”
* Don’t use a business plan to show how much you know about your business.
* Nobody reads a long-winded business plan: not bankers, bosses, nor venture capitalists. Years ago, people were favorably impressed by long plans. Today, nobody is interested in a business plan more than 50 pages long.
What can help me write a good business plan?
* Sample business plans – Over 100 free sample business plans from various industries
* Business plan template – This fill-in-the-blank business plan template is in the format preferred by the SBA and banks
* Start a business – An easy to follow six step process with plenty of information for helping to start a new business
* Business plan software – The #1 best selling business plan software helps you to write a professional business plan
The following illustration shows a business plan as part of a process. You can think about the good or bad of a plan as the plan itself, measuring its value by its contents. There are some qualities in a plan that make it more likely to create results, and these are important. However, it is even better to see the plan as part of the whole process of results, because even a great plan is wasted if nobody follows it.
Planning is a process, not just a plan
A business plan will be hard to implement unless it is simple, specific, realistic and complete. Even if it is all these things, a good plan will need someone to follow up and check on it. The plan depends on the human elements around it, particularly the process of commitment and involvement, and the tracking and follow-up that comes afterward.
Successful implementation starts with a good plan. There are elements that will make a plan more likely to be successfully implemented. Some of the clues to implementation include:
1. Is the plan simple? Is it easy to understand and to act on? Does it communicate its contents easily and practically?
2. Is the plan specific? Are its objectives concrete and measurable? Does it include specific actions and activities, each with specific dates of completion, specific persons responsible and specific budgets?
3. Is the plan realistic? Are the sales goals, expense budgets, and milestone dates realistic? Nothing stifles implementation like unrealistic goals.
4. Is the plan complete? Does it include all the necessary elements? Requirements of a business plan vary, depending on the context. There is no guarantee, however, that the plan will work if it doesn’t cover the main bases.
Uses of business plans
Too many people think of business plans as something you do to start a company, apply for a loan, or find investors. Yes, they are vital for those purposes, but there’s a lot more to it.
Preparing a business plan is an organized, logical way to look at all of the important aspects of a business. First, decide what you will use the plan for, such as to:
* Define and fix objectives, and programs to achieve those objectives.
* Create regular business review and course correction.
* Define a new business.
* Support a loan application.
* Define agreements between partners.
* Set a value on a business for sale or legal purposes.
* Evaluate a new product line, promotion, or expansion.
No time to plan? A common misconception
“Not enough time for a plan,” business people say. “I can’t plan. I’m too busy getting things done.” A business plan now can save time and stress later.
Too many businesses make business plans only when they have to. Unless a bank or investors want to look at a business plan, there isn’t likely to be a plan written. The busier you are, the more you need to plan. If you are always putting out fires, you should build fire breaks or a sprinkler system. You can lose the whole forest for too much attention to the individual trees.
Keys to better business plans
* Use a bussiness plan to set concrete goals, responsibilities, and deadlines to guide your business.
* A good business plan assigns tasks to people or departments and sets milestones and deadlines for tracking implementation.
* A practical business plan includes 10 parts implementation for every one part strategy.
* As part of the implementation of a business plan, it should provide a forum for regular review and course corrections.
* Good business plans are practical.
Business plan “don’ts”
* Don’t use a business plan to show how much you know about your business.
* Nobody reads a long-winded business plan: not bankers, bosses, nor venture capitalists. Years ago, people were favorably impressed by long plans. Today, nobody is interested in a business plan more than 50 pages long.
What can help me write a good business plan?
* Sample business plans – Over 100 free sample business plans from various industries
* Business plan template – This fill-in-the-blank business plan template is in the format preferred by the SBA and banks
* Start a business – An easy to follow six step process with plenty of information for helping to start a new business
* Business plan software – The #1 best selling business plan software helps you to write a professional business plan
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