Business planning doesn't offer solutions to business problems. Rather, business planning is a concrete methodology or framework to structure concepts and information about a project. A well written business plan will determine the feasibility of a project. It lays out the actions necessary to complete your project. That means your success or profit = sound planning. It really is that simple. The templates provided here give you the roadmap needed for your specific project.
A number of adjectives describe the business planning process - the best are: logical, rational and regimented. A business plan organizes, directs, coordinates, controls and facilitates the development of a project from its inception to its completion. No matter how you describe the process or the plan, basic business planning is a systematic method for reducing risk and enhancing success for any type of business operation.
The complexity of a business plan will vary with the type of business. And the size of your business plan will reflect the complexity of your specific situation and project, only you can supply the details.
While a business plan is everything above, it's also a prediction of your future based on current abstractions, assumptions and estimates. This is unavoidable. In fact, if we could see into the future, there'd be no need for business plans. When a business plan is implemented the plan comes in contact with reality. This can be a nasty shock for many business executives causing a good deal of doubt about their business plan. However, reality is the feedback necessary to reinforce or adjust the business plan to achieve project completion, growth and success. If your plan's not working, change items in the plan! The plan itself will show you what impact different changes will have on other areas of your company. A business plan is never cast in stone. It's simply a management tool to reduce risk and ensure as much success for you as possible.
A business plan forces a business executive to establish written goals and objectives. Goals and objectives should be:
both long and short term
scheduled, i.e. related to time
Once goals and objectives are set they must be translated into strategies and paths of action.
For a new business or operation, the business plan is the first time diverse pieces of information on a project are brought together in one document. The information contained in your business plan is the base for both your decisions and those of lenders, creditors, etc. who review your business. After you've implemented your business plan you can measure your performance against the facts and figures in the plan. This helps you evaluate where your weaknesses and strengths lie.
One of the most important aspects of a business is communication. A business plan is one of the easiest and most reliable communication tools an executive can possess. In black and white, it details to the reader, information about your company.
Your business plan can be used to communicate information to a variety of people. Lenders and creditors will obviously want to read your business plan. Their decision on whether to extend credit will be based on the information they get out of your business plan.
This article is divided into sections to give a description of what you should prepare for your business plan. Each section has a template which can be used as a format for tabulating the necessary information on your company. When you've completed all the templates, then you have a draft business plan. Rewrite this draft in final copy format for presentation to lenders, creditors, investors, employees, and anyone else to whom you wish to give information about your business development project. The section below can be used to develop the table of contents for YOUR business plan.
Your business plan should be oriented to creating a business which will satisfy the wants and needs of your future customers rather than producing a product or providing a service. This market orientation will help you avoid the pitfalls of opening a business to satisfy your desire to own a business. The best possible situation is where your skills and abilities mesh with the wants and needs of your customers to form an efficient high demand business. The markets' need for something comes first. Then you profit by filling that need, not the other way around.
The following sections are to be completed.
Statement of Purpose
Amount and type of loan required
Amount of money you are putting in
Period loan will be outstanding
Purpose of the loan
Name of company
Purpose of business
Legal form of organization
Personal financial statement (current)
Personal tax returns (3 years)
Description of Business
Detail description of business
Research about the industry
Appealing factors of the business
Factors that will determine the success of business
Will you rent or buy the building (Why?)
Market Research - Product
Environment and Industry Analysis
Characteristics of Your Target Market or Customer
Marketing Mix Strategy
Uses of Proceeds
Start Up Costs Worksheets
Projected Profit and Loss Statements (3 years)
Proforma Cash Flows (3 years)
Projected Balance Sheets (2 years)
Keeping Your Plan Up To Date
Directory of Useful Contacts
Include: cost of living budget, letters of reference, letters of intent, promotional materials, copies of leases, contracts and other legal documents that you believe convey an accurate picture of your business.
Give the impression that your business is solid, successful and prepared for a future of growth and expansion.
The above sections will give an understanding of how your business is organized and how it satisfies customer demands. Obviously, depending on the industry a business is in, certain parts will remain unread and blank while others may be filled and additional paper added. If you feel there is information you have in addition to that mentioned here which may be useful to a lender, do not hesitate to add a section.
· 1 decade ago