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Business Plans

Business Plan is a written document that describes your core business objectives and how you plan to achieve them over a set period of time

Business Plan Overview

Nearly all business experts agree on one thing: the importance of drafting a business plan. A lot of new businesses are carried away and believe their passion and optimism are enough to build a successful company, but operating without even a basic plan can prove even more time-consuming in the long run.

When someone asks, “So what’s your business model?” what they really want to know is how you plan to make money and how soon you plan to do so. In simplest terms, a business model is a realistic explanation of where your business revenues will come from.

How will the business make money?

You may think this would be the most basic of all questions, but in reality, many start-up enterprises fail to formulate how they’ll make money.

What does your business need to get off the ground?

Start-ups require a lot of enthusiasm and hard work, and often plenty of cold cash.

What is the operating budget?

The financial section of your business plan also must address how much it will cost you to run your business, month by month, and how much you need to earn to meet your expenses and make a profit.

Benefits

The time you invest in your business plan will pay off many times over. Some of the most obvious benefits you can gain from business planning include;
An opportunity to test out a new idea to see if it holds any real promise of success
You have a clear statement of your business mission and vision that you can always refer back to.
It can be a blueprint you can use to focus your energy and keep your company on track.
It’s a useful document in the quest for funding from banks or other sources
It shows benchmarks you can use to track your performance and make any necessary corrections or changes to the way you operate.

plan

It’s an honest assessment of your company’s strengths and weaknesses, giving you something to build on
It’s also a useful roadmap and timetable for achieving your goals and objectives
The plan could include a description of the products and services you offer, and an explanation of your marketing strategies
You can show an analysis of your revenues, costs, and projected profits.
It’s also a useful document you can use to introduce your business to suppliers, vendors, lenders, and others.
Most importantly it’s a description of your business model, showing how you plan to make money and stay in business, and should incorporate an action plan that anticipates potential detours or hurdles you may encounter, with possible solutions.

What can go wrong without a business plan?

The many benefits of having a business plan should now be much clearer, but in case you’re still not convinced, consider what can go wrong if you don’t take time to plan. You risk running out of cash before you open your doors because you haven’t anticipated your start-up costs
Missing sales projections because you don’t really know who your customers are and what they want
Losing customers because your quality or service falls short
Becoming overwhelmed by too many options because you didn’t take the time to focus on a mission and vision for your company
Going bankrupt because you don’t have a rational business model or a plan for how to make money

One reason people are sometimes intimidated by the prospect of writing a business plan is simple: They don’t have a clue what a plan should contain. The good news is that there are no hard and fast rules. In fact, no two plans look exactly alike. For a sole trader, a business plan may run a couple of pages. A business plan for a large company plotting a much larger turnover can take up a hundred or more pages, with plenty of appendices. But to be useful and effective, your business plan should be unique to you!

Whether you’re a start-up or an established company, a carefully crafted business plan is a road map to your firm’s success. But with the internet saturated with good advice it can be confusing and hard to know where to begin.

What business are you in?

The question sounds easy enough, but even small companies often have to give some thought to defining what their business is.

How will the business make money?

You may think this would be the most basic of all questions, but in reality, many start-up enterprises fail to formulate how they’ll make money. A hair salon may make some of its money from cutting, shampooing, and styling hair, for example, but it may also find that it can substantially boost income by selling supplementary hair care products. Thinking through all the different ways that your business can make money is crucial to success.

What does your business need to get off the ground?

Start-ups require a lot of enthusiasm and hard work, and often plenty of cold cash. One of the biggest blunders new companies make is not thinking ahead about how much money they’ll need to get up and running. When the money runs out before the doors open, the best business idea in the world isn’t going to spell success.

What is the operating budget?

The financial section of your business plan also must address how much it will cost you to run your business, month by month, and how much you need to earn to meet your expenses and make a profit. You’ll then need to think about how much you’ll charge for your product and service and how much you can expect to take in month by month. Needless to say, the more carefully you think through all these questions in advance, the better prepared you’ll be.

Who are your customers?

The more you know about your prospective customers, the more successful you’re likely to be. Take the time to look at what your customers like and don’t like. The Internet has made it easier to understand customers. All you have to do is read through reviews to know what people are raving about and what they’re dissing, covering a wide range of products and services.

How will you reach your customers?

You can reach your customers these days in more ways than ever before. The most common ways are via websites and Social Media. Your business plan should spell out how you intend to reach your customers and maintain an ongoing relationship with them.

Social media has created brand new ways to engage in two-way exchanges with your customers, and whilst digital communications have greatly improved customer service for many businesses, the Internet has also raised expectations about what great service should be. Customers are savvier than ever, and consequently more demanding.

What sets you apart from the competition?

Unless you’ve invented something unlike anything the world has ever seen before, you’re likely to be competing in a marketplace with other players. To succeed, you have to give customers good reasons to choose you over your competitors. It’s important therefore that you find out all you can about your competitors and their strengths and weaknesses and consider how the business you’re planning stacks up against theirs. Typically, businesses compete on the basis of price, quality, service, and features, but a company’s image can also be part of its competitive advantage.

What are your strengths and weaknesses?

This question may well be the most important one as you develop your business plan. Most people have a vague sense of what they do well and what they could do better and so writing a business plan can give you an opportunity to be far more honest and thorough in your assessment of yourself. A formal SWOT analysis grid can allow you to measure your strengths and weaknesses against the opportunities and threats in your business environment.

This question is also so important because business success really depends on leveraging your strengths and addressing your weaknesses.

What are the biggest challenges you face?

Every business faces challenges, especially in competitive markets or with technological change. Your business plan should describe in detail the particular challenges you think you’ll face and how you plan to overcome them. The challenges can be part of the business environment you compete in but some of the challenges you face are also likely to be related specifically to your company, such as how you’ll be able to respond quickly to changes in the marketplace.

How will you measure success?

The simple answer to this question is money. Make enough money, and any business is a success. Your business plan should acknowledge all the ways you plan to measure your success. Your financial section will look at the cash you earn whereas your goals and objectives will mark off specific mileposts that will help you chart your progress. Your mission and value statements will serve as a guide to the less tangible items that spell success for you.

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