If You're Starting A Business, You Need A Plan

Every new venture should begin with a plan but when it comes to putting together a business plan, it can be difficult, and complex. Even worse, if done wrong you'll end up with worthless information spread out over tons of paper. When it comes to business plans I've seen some really great ones but I've also seen some really bad ones too. When most people set out to write their business plan they do one of two things. They either purchase software and just followed the steps, not really knowing what elements actually belong in their plan. Or worse, they pay someone $500 to $2,500 to use the same type of software to do basically the same thing - follow the steps! The end result is you have a business plan that is not functional and therefore is basically useless.

Unless you are trying to get a business loan, you do not need a formal business plan but you do need a plan. Before you open your doors, sit down and think through the many details that will be involved with running your business. Putting this information on paper will help you be prepared and keep you on track long term.

While your plan will be uniquely designed for your business, there are certain objectives that you want to make sure you include. A great business plan must:

1. Set forth goals and how they will be achieved.

2. Define obstacles and outline strategies to overcome them.

3. State the legal and organizational structure of the business.

4. Quantifies financial needs and make financial projections.

The length of your plan depends on the purpose you will use it for. If you plan to use it as a roadmap then it can be just one page. If you plan to present it to investors then it may be 100 pages. Regardless of your objective, when putting your plan together there are three major areas you'll want to tackle. Here are a few questions to get you started. Answer them as they apply to your business.

The Business

What is the name of your business?

What is the legal structure of your business?

What is your product/service?

What does it do?

How is your business uniquely positioned to succeed?

What are existing conditions within your industry?

How do you intend to grow?

How will you handle orders?

The Market

Who are your customers and why?

What needs are you meeting for them?

How will you motivate them to buy from you?

How will you find and attract these customers?

Who is your competition?

What advantage do you have over your competition?

How will you position yourself to win market share?

Do you have technical data, surveys, or information sources to back your claims?

Finances

What are your start-up costs?

How will the money be used?

When will your business become profitable?

How much money are you bringing to your business?

What are your financial projections for the next six months?

What are your financial projections for the twelve months?

What are your financial projections for the next two years?

A few additional key elements to include in your business plan:

Executive Summary - Summation of important points within your business plan. Should not be over three pages long. If you are seeking financing from investors, this section will be of particular interest to them because it will help them decide if you are a worthy investment vehicle.

Company Summary - Describes your business, customer focus, and your goals. This section should include your business structure, start-up projections, and business location.

Products/Services - Describes what you have to offer, advantage to the customer, your reason as to the need for product/service, and a look at your place among the competition.

Market Analysis - Details the who, what, where, why and how within your market. Also includes an analysis of your industry and your strengths therein.

Marketing Strategies - Details your plan for operating in competitive environments. Includes sales forecasts, marketing details, and gives an in-depth look at actual customer acquisition.

Operations - Details the structure and operation of your organization.

Financial Plan - Provides a comprehensive look at cash flow, profit and loss, break-even analysis, and other financial indicators.

Your business is less likely to fail if you're able to predict outcomes and putting together this plan will help you set some realistic goals for your success. The information provided serves as general outline but for it to work; you'll have to provide the details. How may details? As many as are needed. Most assuredly, your efforts will be rewarded for years to come. Remember, you are in it to win it so make sure you stay focused and keep your eye on the prize!