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Writing Business Plans
Small Business Plan
Writing your Business Plan: Imagine taking a trip without a map. When starting a business, it is vital to ensure your road to success includes the why, how, where, what, and who. Why are you starting this business? How will you do so and how will your business grow? Where will you seek input and customers? What will you provide or sell? Who will your customers be? Often, business start-ups fail due to the lack of clarity of the business goal. The business owner’s goal might be too vague or too complicated.
In order for all other business operations, including marketing, sales, the preparation of income statements and budgets to flow and make sense, a business plan must exist. Proper business decisions can be made with a solid business plan in place. A business plan is the source from which all business activities flow. A good start-up business plan, also known as a strategic plan, includes a summary of the business goal, mission and vision statements; a strengths, weaknesses, opportunities and threats (SWOT) analysis; marketplace analysis; what is necessary for success; income statement or projected income statement; cash flow analysis; and a break-even analysis. Once the why, how, where what and who have been identified, a goal statement can be written. Every business should have a mission. This should include, in two or three paragraphs at the most, a business’ “big picture” goal. The vision is more personal and includes what the business hopes to accomplish by implementing the mission. A vision may or may not be something that can be accomplished immediately and does not have to exist for the business plan to succeed. However, for the business to succeed, at least a few portions of the mission should begin to be followed as soon as the business starts.
Once the SWOT analysis is created, a business can identify what it needs to succeed, what it needs to obtain or eliminate, and can proceed to analyze the environment. What environmental constraints exist that could help or hinder the business? Some examples could be laws, such as zoning; sales taxes; and competition. Conducting a marketplace analysis to determine how exactly competition could be an obstacle is imperative. A break-even analysis, provided with estimated scenarios, can give information about the minimum revenue needed for the business in order for it to survive. A projected income statement and cash flow analysis follow. After these studies are complete, business viability can be decided. Sometimes, it is determined to take a different business direction, align with an existing, more successful and similar business, or to place the idea aside.
After the startup business plan is complete, cash flow analysis should be included, as well as clear, concise ways in which the business plan will be implemented. Implementation strategies include tying goals directly into business functions such as sales, employee productivity (shown in performance reviews), product development, and marketing.
Business success depends on how well all business goals are tied in with the business plan and mission, and how regularly a review of the business plans takes place. In particular with new businesses, a business plan should be reviewed monthly or quarterly and modified if necessary.
Actual formats for creating business plans are commonly available in textbooks, online, and via computer software programs. The format should be readable. Keep the audience in mind. The audience includes parties who might have an interest in the business as investors, applicants, clients or board members, or parties who have the necessity to read the plan, such as employees, upper management, attorneys, bankers, or IRS.
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