Writting A Business Plan that Will Help You Succeed!

Writing Your Business Plan: Laying the Foundation for a Successful Business

A business plan is key to the success of a new business, and the growth and development of an existing one. Although many businesses get off the ground without having a business plan in place, it is an omission guaranteed to cost both time and money.  Whether you are in the planning stages of your new venture, or a few years down the road, the investment of time put into the development of a cohesive business plan will provide lucrative returns.

There are numerous detailed versions of business plans such as feasibility and expansion plans. The focus here will be on the start-up and the on-going business plan. A start-up business plan provides two important services. It is a method for you to determine whether or not to pursue your concept. It also is am important document to provide information to lenders and investors who are interested in funding your business.

The key components of a start-up plan should include a: summary, mission statement, elements of success, market analysis and a breakeven analysis. New entrepreneurs should note that the cash flow of your business is the bottom line. Do not confuse cash flow with profit. That is why the breakeven analysis is a crucial component of your start-up plan. Realistic numbers and expectations spell success, whereas as faulty understanding of your business development will lead to poor decision making, stress and ultimately failure.

Summary: This should be an overview of the service or product you intend to sell, the legal establishment of the business, the reasons you expect to do well in this particular market, background of the owners/management team, and basic highlights of the entire plan. While only a page or two, this sets the tone for your plan.

Mission Statement: This is the reason your company exists. If this is not clear, concise and compelling, you are not prepared to move ahead.

Elements of Success: What key items will lead to the success of your business, This is the place for specifics: management strategy, financial milestones, markers that will indicate you are working toward your goals. Essentially, this shows your path to success in quantifiable steps.

Market Analysis: First time entrepreneurs frequently underestimate the importance of this step. You may bring the most innovation product on earth to market, but like selling ice to the Eskimos, if the market doesn't want or need it, you are sunk! Your analysis should include demographics (like age and income) that will use your service, an in-depth analysis of your location or proposed target audience's location, how you intend to reach them, and a marketing plan that includes budget and specific tools and prices. For instance, take into account the cost of running your website and monthly print ads.

Break-Even Analysis: Remember, cash flow is the bottom line. You need to know when you intend to beak-even and have numbers, charts and dates to support that contention. Most people will spend time on this if they are seeking outside funding. But it's just as important for your own purposes. Crunch your numbers, look for any potential stumbling blocks to your success, and have solutions ready to address them now rather than six months down the road.

The start-up plan is your due diligence for beginning a business. Putting the time, research and effort at this point will save you a world of grief, time and money down the road.

An Ongoing Business Plan

If you have already been in business a while, the components of your plan will differ somewhat from a start-up plan. You need a plan whether you are trying to refocus your business, grow or merge, sell or bring in partners and seek additional funding. While these specifics will determine some of the details there are certain components which must be included: an executive summary, description of the company, products or services, market analysis, strategy and implementation specific, management team background, and financials.

Of course, many of these components are similar to those of the start-up plan, however, you now have 3 or 5 or 10 years of additional information to explain and provide.

Executive Summary: As in the start-up explanation. While presented first, most people find it helpful to write this last, as it summarizes every else in the report.

Description of Company: In addition to the legal entity, you will provide the history and start-up of your business.

Product or Service: This will be essentially the same as in a start-up plan, although you will have a more in-depth understanding based on your years of experience providing the product or service. Make sure this shows in your presentation.

Market Analysis: This may have changed significantly since you first began your business. So it is to your benefit to look at all the same factors you would use for a start up plan. It may be time to alter your marketing plan or tweak the way you provide your service to your audience. Again, this step is often overlooked, but is key to bringing in more business.

Strategy and Implementation Specifics: This may include management, financial, marketing and operational methods and goals. It must be very specific, outlining who carries what responsibilities, a time frame for accomplishing these goals, and markers to measure success.

Management Team: Has your management team changed, or responsibilities shifted over time? Do they need to? Background, responsibilities, expectations and strategy should be well defined.

Financials: Your bottom line is the bottom line. Include profit and loss, cash flow analysis, assumptions, breakeven analysis, graphs, and charts. Explain every thing and leave no questions unanswered.

Pulling it All Together

A specific, complete, and well-researched business plan is the foundation of success. With a weak or shaky foundation the wall will come crashing down. Allocate the time to creating a solid plan now, just as you would allocate time for the daily functions of your business. Help is available through numerous sources: small business centers, books and software. Your due diligence in forming a good business plan now will be the key to your future success.