Many people underestimate the importance of a business plan when it is the most important document that your business will ever produce. Your business plan stands as a set of business goals, the reasons as to why they are believed to be attainable and the plan for reaching these goals.
Your business plan is typically used to focus on financial goals but should also be used to demonstrate background information on your organisation. It should include everything that your business is about with information on how it will appeal to its target market and what makes it different from existing businesses that are within the same market. You should use your business plan to secure finance and as a way of allowing people to evaluate the perspectives of your company.
A good business plans should be used for a variety of purposes. Many entrepreneurs make the mistake of thinking that a business plan is only useful to help them raise money for their business. However, a well written business plan is in invaluable tool to help you run your business as well. By having a viable business plan, not only will you be able to see how your business is progressing, but you will also be able to impart your vision to others. They will be able to see how well you are running your business with respect to your initial goals and make an informed decision about any risks associated with your business.
As some of you may already know, what you put into your business plan is key to it being a well structured guide to your business. Some of things that should be included in your business are:
Overview of the business you want to start - many leaders/investors make judgments about your business based on this section alone.
Short description of business opportunity - who you are/ what you plan to sell/offer and to who and why
Marketing and sales strategy - why you think people will buy what you want to sell
Management team/personnel - your credentials and people you plan to recruit
Your operations - premises, production, facilities, management information systems
Financial forecast - translates everything you have said in previous sections into numbers
Your business plan is your main access to business finance. Without a well developed plan you won't gain the financial help you desire, especially if you are hoping to use the help of a business angel or a venture capitalist.
You should remember that your business plan is a living document; it is something that you will use throughout your business and due to this fact it will need updating on a regular basis. Over time, things will change for your business. In some cases, they will change outside of your direct control. Updating your business plan will allow you to plan appropriately to reflect the dynamic changes occurring outside of your direct control and that could have an impact on your business. You should always be prepared to update your business plan to ensure that you have sufficient contingency plans to deal with external influences that could affect the way you do business.
Remember there is no set content for your business plan, what you put in it should reflect your business.
About the Author
Helen Cox is the web master of ARCH Entrepreneurs, experts within all areas of Business Finance and Business Angels.
