Running a business without a business plan is like rock climbing blindfolded. Your chances of making it successfully to the top are slim. And the process will surely be a death-defying one.
A business plan is not just a means to securing financing. Instead, it is a step-by-step guide to running your business and creating the product or service that will make it in the marketplace. And like any other map, your plan will have to be adjusted according to your vision for the company, conditions and opportunities in the marketplace and your business’ current condition.
Whether it’s formal or informal, every business has a plan. The local hair salon may not have formally written down the plan, but before setting up shop, a smart owner would have assessed the need for a shop in that area of town, the ability to attract clients there, the appropriate amount of chairs, whether to hire someone to do the shampooing and sweeping, the cost of utilities, the parking availability for clients. The owner who waits to figure these things out using trial and mostly error will be lucky to be left with his or her wits, much less any customers. A business plan helps to minimizes those pitfalls.
To many people the concept of writing a business plan for their own business is a daunting one, however it's a simple case of answering three questions:
This question is your starting point as it seeks to provide a planning base. It looks at your business to establish such things as:
Answering the question, “Where are you now?” is often a major stumbling block because most people don’t know where to start. However, the answer is surprisingly simple if you divide your business planning into four key areas: Operational, Marketing, Employees and Finance. Such a division allows you to analyze your business (or assumed business) to create a solid planning base.
This is simply asking you to visualize your business at a date in the future. This visualization process is almost identical to setting personal objectives, however the focus here is on business objectives.
What steps do you need to take in order to achieve the business objectives you have set? These steps, or strategies, can be identified, written down and programmed.
Additional things a business plan should consider:
While much of this may have occurred to you informally, it is very import to write it down. If you ever need to approach a bank or investors, you will need it. Writing it down will reinforce your vision, give you a reference point for checking your business’ progress and will most likely bring up factors you did not consider when creating the plan in your head.
Writing your business plan down:
Business plans are not only for those just setting out their journey in the marketplace. They are useful when acquiring a new business, forecasting growth, introducing a new product or service, entering a new market, responding to changes in the market or changing a significant aspect of your business.
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