A Road Map for Success
Building a business is a lot like planning a trip.
Commit your plans to paper. Big dreams have launched many a new business, but they aren’t enough to sustain one. To ensure that you start off on the right track and can carry your vision through to completion, you will need to prepare a written business plan. Committing your plans to paper may seem like busy work. But to potential investors, the extra effort you put into crafting a workable business plan may be just the proof they need to consider you and your business worthy of their financial support.
An effective business plan describes: (1) the nature of your business; (2) how you intend to achieve specific goals for your business; and (3) the profits you expect to gain as a result. And since all business plans typically consist of the same 8-10 specific elements, there’s no mystery involved in putting one together.
Why you need a business plan To succeed as a business owner, you need to craft a written plan for two important reasons:
The process of writing a plan causes you to think about every aspect of your business and devise solutions to potential problems before you have to face them.
No potential investor or financial institution will take you or your business seriously without one.
What to include in your business plan A business plan typically consists of these elements:
- Executive Summary Highlight the key strengths of your plan, including where you want to take your company and why your idea will be successful.
- Company Description Make this your extended “elevator pitch” to help readers, especially potential investors, quickly grasp the uniqueness of your business.
- Market Analysis Demonstrate that you understand your industry, target market, customers, competitors and pricing structure.
- Organization and Management Describe your company’s organizational structure; introduce the principals and key members of your management team.
- Service or Product Line Emphasize the benefits you can provide to current and potential customers.
- Marketing and Sales Explain how you plan to promote your product, create customers and boost sales.
- Funding Requests Lay out current and future funding requirements; tell how you will use any funds you may receive and the types of funding you prefer.
- Financial ProjectionsSummarize projected income and expenses, past credit history, intended allocation of resources and other financial details.
- Appendix Provide supporting information and documents, including but not limited to: your credit history; letters of reference; resumes of key managers; leases; licenses, permits and/or patents; a list of business consultants (attorney, accountant, etc.); relevant research, magazine articles or book references.