Beginning with a firmly constructed business plan is essential in creating a successful enterprise that meets your idea of growth and accomplishment. With such a plan, you can transform all of your business dreams into a productive reality. Whether it is new or established, operating your own business is often a rewarding experience that is sometimes risky in nature. However, you can minimize this risk at the onset through a carefully thought-out approach to a business start up, expansion, or purchase. For a successful jump start to your business, follow these steps of preparation:
- Research your intended business venture and verify its viability.
- Discover and document your basic objectives for the business.
- Take the time to note potential risks, inherent facts, and prospective opportunities.
- Research the existing market in your targeted area.
- Identify and critique your product or service, the current trends within the industry, the market conditions, and existing competition.
- Circumvent potential risks or problems immediately.
- Document your business objectives and goals.
- Amass the business acumen you must have in order to create a strong base for moving forward with these goals and objectives.
Once you have accomplished the strategies above, it is time to develop a strong business plan that strategically functions as an interactive plan to guide your business in its path along each objective. Ideally, this business plan performs as a living entity that continues to modify itself in an effort to help your company achieve each of its short and long-term goals. Although this business plan might begin with a strategy for securing funds that act as a catalyst for your company, it must also include an action plan that can be used to implement the strategies that will accomplish your business goals.
Preparation and planning are powerful tools that will take you from the inception of a business to its fruition as a successful entity. Even those who begin without a clear concept of what they are about to undertake can improve their chances of success by developing and incorporating a strategic plan to achieve their primary and secondary goals. This article presents the fundamental tasks necessary to create a business plan that takes your business from the first step to the top.
What is a Strategic Plan?
A strategic plan is one that sets the stage for the success of a business. It incorporates the visions of the business owner and other key staff members in strategies that will lead to the achievement of both short-term goals and long-term goals.
The strategic business plan has two useful purposes. Primarily, it is used to delineate the goals and strategies of getting your business up and running as well as propelling it into success. Secondly, it is useful in obtaining business capital since most business loans require a business plan in order to qualify for the loan. Setting the stage for success with a business plan allows you to organize your goals and allocate resources to achieve these goals.
This strategy also allows a business owner to focus on future opportunities for growth and circumvention of problems. If properly designed, a business plan sets forth all of the key facets needed for success including the business vision, short-term and long-term goals, priorities, strategies for implementation of goals, products and services, and all financing needs both current and future. This type of plan should also provide the essential information surrounding the company, the key staff members or management team, and primary objectives. The most successful business plans will address each of these facets for a minimum of three to five years.
How to Write a Business Plan
Several different facets should be included in a well-organized business plan. While the length and format of various business plans will vary, the basic components will be similar. Not only must the plan be well written, but also, it should be organized in a logical manner using compelling phrasing that generates confidence in your business enterprise. Therefore, the wording should appeal to the target audience while it outlines the specific details related to the potential strengths and weaknesses, potential for competition, prospective financing, and expected performance. Each of the following aspects should be included in a well-written business plan:
Cover Letter- The cover letter should introduce the business and its business plan to the intended audience.
Title Page- The title page should include the pertinent details of the plan including the business owner’s name, address, and phone number. It should also include the names and titles of the executive staff and contact information.
Table of Contents- The table of contents should list a list of the information that follows for easy reference.
Statement of Purpose- The statement of purpose presents a clear explanation of each of the company’s goals along with the intended method for achieving these goals. It should also include the primary value of the product or service along with the amount of capital that will be needed and repayment expectations.
Executive Summary- The executive summary is very likely the most important aspect of the business plan. It should include a short synopsis highlighting the primary points of the plan as well as the background of the business. This detailed summary should also provide the existing market, potential risks, the expected internal rate of return, the Return on Investment (ROI), the value proposition, and the primary staff members.
Market Information- The market information should provide the target audience or market for your product or service. Facts and details supporting this information should be included. Typically, information taken from research on the market should be provided including past growth rates, expected growth trends, critical market areas, and initial and future markets.
Company Data- The company should be described in detail including its history, legal structure, its principals, the market potential, prospective growth, revenue size, industry, and type.
Product or Service Description- Along with a description of the product or service, the intended stage of development and potential business benefits should be included. A description of how the products or services will satisfy a true need and allow you to compete with existing businesses should also be included.
Management Team Information- The information for the management team should provide essential data identifying the skills of each of the critical staff members of the business including partners, business advisors, financial advisors, and attorneys. List names, titles, compensation, background, and responsibilities.
Potential Risk Factors- A general assessment of the potential risks of the business venture should be listed along with a description of strategies designed to overcome these obstacles.
Action Plan- The action plan details the strategies that will be used to actively transform your business plan into positive results. It includes the steps that will be taken to open the business, obtain licenses to do business, obtain products, create schedules, hire employees, create partnerships, arrange delivery, and set up customer service. Each of these should assist with the ability to measure the progress of the building.
Financial Information- Future revenues should be included for the next three to five years in this section. For the best presentation, include items such as banking relationships, balance sheets, income statements, loan information, financing plans, cash flow and capital requirements.
Legal Preparation- The legal preparation section should provide a detailed list of the corporate bylaws, patents, trademarks, contracts, agreements, and business licenses. It might be necessary to complete some research as to the type of documentation and legal set up that your business will require.
In order to create a worthwhile business plan, it is important to tackle each step individually after conducting the proper research. It is worth the effort to create a detailed business plan in order to maximize the company’s potential for success.