How to Write (and Follow) a Business Plan

What is a business plan?   And why do I need one?

A business plan is a formal written document of attainable business goals and detailed plans for reaching them.  It lays out a written plan from a financial, marketing and operational viewpoint.

Do I need one?  Operating a business without a concrete idea of where you’ve been and where you are headed is a little bit like taking a Sunday scenic car ride.  You may enjoy the journey but may never get to the destination you had in mind.

Like any good story, you need a framework to tell the tale.  By deciding to create and follow a business plan, you’ve greatly increased the chances that your business venture will succeed.  What 5 things do you need to formulate and implement a good business plan?

1.)  Determine your company and personal objectives.  What are you hoping to accomplish and why?

Before you start drafting your plan, you need to ask yourself some questions to determine the best course of action moving forward.  How many products or services do I plan to offer?  Pricing?  Materials needed?  Locations?  Growth projections?  What am I personally willing to do to meet these objectives?

Another important reason to “plan your plan” is that you may be held accountable for the projections and proposals it contains. Understanding your goals and direction is especially true if you use your plan to raise money to finance your company. Your plan may forecast opening new locations in the first five years of your operation.  Investors need to trust that you are actually working towards the goals laid out in this business plan.

2.)  Goals.  What do you REALLY want to achieve with this business venture?  Picture the course of the business in the next 12 months, 2-3 years or even 5 years out.  What do you see?  Are you willing to do whatever it takes to achieve these goals?

Things to consider when making your company’s goals:

  • Number of products/services to offer today?  In two -three years?  In five years?
  • Number of employees needed today and in the future?
  • Financial investment you’re will to make now?  Over next 5 years?
  • Locations and future expansions?
  • Market share today and growth for market share in future?
  • Will you be hands on?  If no, are you able to delegate responsibilities?

3)  Financing is an important piece of the puzzle when starting any business venture.  It doesn’t necessarily take a lot of money to make a lot of money, but it does take some. That’s especially true if, as part of examining your goals and objectives, you envision rapid growth.

Do you have start-up financing secured to achieve the goals laid out in your business plan?  How will you generate financing down the road to cover expansion costs or increases in costs associated with running your business?  Are you willing to take on business partners or investors?   Planning for these scenarios will help keep you on course down the road.

4.)  Implementation.  Deciding how you intend to implement your business plan is an important part of preparing to write it.  Implementation entails really getting into the nuts and bolts of HOW your plan will specifically work.  What do you want to accomplish with the implementation of your business plan?

  • Attract investors?  You now have a detailed plan that spells out to investors exactly what you are planning to do and when.
  • Recruit quality employees?  You may want to add some information about stock plans, work culture, locations and opportunities for growth and advancement.
  • Generate sales?  Get the ball rolling right off the bat!  Showing prospective customers and clients the detailed business plan you have in place, may generate the interest you need to get things moving forward with sales.

5.)  Measure, analyze and evolve.  The business plan is a living document that you need to examine and adjust over the life of your business.  What’s working?  What isn’t working?  These are important questions to examine regularly.  Keeping business plans updated in real time may seem like a nuisance, but it’s the ideal approach. It allows you to act quickly when you need funding or if you need to sell your business.  It makes your business plan more useful as a road map because it keeps you on top of things at all times. And that’s where you need to be to improve the chances that your business will succeed and grow.

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