Writing Your Business Plan

By deciding to write a business plan, you’ve just greatly increased the chances that your business venture will succeed. People have differing views about the importance of a business plans – some say they’re not worth the paper they’re written on. Nonetheless, being able to describe your business, the industry you operate in and the potential market for your company is downright vital. And you won’t generally address all of those aspects until you actually sit down and write up a plan.

“Creating your business plan and how you are going to use it are key steps in setting the foundation for success.” 

What is a business plan?

A business plan (sometimes known as a business proposal) is a written document that describes your core business objectives and how you plan to achieve them over a set period of time. It is designed to help you, and others, understand how you plan to generate money and make your business sustainable. A business plan often includes information about your goals, strategies, marketing and sales plans and financial forecasts. Read on below for more information about the key sections of a business plan.

Why is a business plan important?

There are many great reasons why it is worth your time creating a business plan. A business plan:

  • Provides a structured way of organizing your thoughts and clarifying your idea
  • Helps you set out your goals and spot any potential problems in achieving these goals
  • Gives you a clear strategy to follow when things get busy
  • Is often essential for securing external finance for your business
  • Allows you to measure your progress as you go along
  • Ensures all of your team are working towards the same vision
  • Helps you plan for the future.

How will you use you business plan?

Believe it or not, part of building your plan is planning what you’ll do with it. A business plan can be used for several things, from monitoring your company’s progress toward goals to enticing key employees to join your firm. Deciding how you intend to use yours is an important part of preparing to write it.

  • Do you intend to use your plan to help you raise money? In that case, you’ll have to focus very carefully on the executive summary, the management, and marketing and financial aspects. You’ll need to have a clearly focused vision of how your company is going to make money. If you’re looking for a bank loan, you’ll need to stress your ability to generate sufficient cash flow to service loans. Equity investors, especially venture capitalists, must be shown how they can cash out of your company and generate a rate of return they’ll find acceptable.
  • Do you intend to use your plan to attract talented employees? Then you’ll want to emphasize such things as stock options and other aspects of compensation as well as location, work environment, corporate culture and opportunities for growth and advancement.
  • Do you anticipate showing your plan to suppliers to demonstrate that you’re a worthy customer? A solid business plan may convince a supplier of some precious commodity to favor you over your rivals. It may also help you arrange supplier credit. You may want to stress your blue-ribbon customer list and spotless record of repaying trade debts in this plan.

Creating your business plan and how you are going to use it are key steps in setting the foundation for success.

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