Are you a new entrepreneur? What are your plans? No business ever got a successful start without a business plan, like Sandgrens Clogs for example – they sell Swedish Clogs and got started with a business plan. The purpose of this blog is not to identify the contents of a plan, but to explore why you must have such a plan.
Business plans are most often prepared to justify financing like when you’re searching for a new house to buy in new communities for example. Do you need venture capital or a bank loan? The plan helps to avoid financial and/or emotional disaster.
A sound business plan is important to success in any business venture. It can become the controlling document that allows you to expand. It shows enthusiasm for your business and can build upon that enthusiasm. Your may operate from the spare bedroom, but what is required to expand? A plan will be necessary.
Developing the Plan
Some important things to remember as you begin to develop your business plan:
- Make the plan as concise and crisply written. Keep detail within 25-30 pages, plus any supporting documentation and free from error.
- Convey the marketing opportunities, ranking them by return.
- Convey the depth and strength of skills of your people.
- Discuss recruiting methods and types of people you seek.
- Have someone with business planning experience prepare your document. It helps to obtain financing.
There Are A Few Cautions
Here are a few things to avoid:
- Don’t make unrealistic assumptions. Your business plan must contain details of how you intend to grow.
- Don’t underestimate the impact on the market of similar competing products and opportunities.
- Define all terms. Others may not have any idea what your product is or for what it’s used.
- Avoid technical documentation.
- Generalize any unique marketing approaches.
- Identify risks to your business.
And A Few Benefits
Putting the effort into developing a business plan has many benefits. You will:
- Think through what you are about to do, counting the cost, focusing on the tasks.
- Establish measurable goals and objectives.
- Identify skills and resources needed. Attract a “board of directors” that has skills you need.
- Gain a clearer idea of costs and a spending plan.
- Have a realistic idea when and how to move your product.
- Investigate the market to determine the product’s demand.
- Compare your forecasted efforts with others in your locale.
When it is finished, you have a sales tool to promote your business to supporters, financiers, friends, family, customers, suppliers, the Chamber of Commerce, and the Better Business Bureau.