 |
Small Business Information Center. Com |
|
|
|
|
|
||||
You need to "know" if
you want to grow."
|
Business Plan: An important ingredient of success
Business Plans: What are they for, and what will they do for my business?
Don't you only need a business plan to borrow money? Some people believe that a business plan is only required when they are intending to approach a lender, whether it is a banker, venture capitalists or other source of startup capital. It is for more than obtaining financing; it's a guide to help you to define and meet your business goals. It will not automatically make you successful, but it will help you to avoid some the common causes of business failure, such as under-capitalization or the lack of an adequate market. As you research and prepare your business plan, you'll continue to find the weak points and how they comprehensively affect other aspects of your company. You will also discover parts of your business that you never considered before, which may be profitable. Only after putting together a business plan, will you be able to decide whether your small business idea is really worth your time and effort. What is involved, and how will I put it all together? Simply stated, a business plan conveys your business goals, the strategies you will use, potential problems that may confront you in your business and ways to solve them, the organizational structure of your business (including titles and responsibilities), and finally, the amount of capital required to manage your venture, and to keep it going until it can at least break-even. The primary components of a business plan are, first, the business concept where you discuss the industry, your business structure, products and services, and how you plan to make your business a success. The second part is the marketing section, in which you describe and analyze potential customers as well as your competition. You describe who they are, where they are located, what makes them buy, and so on and so forth. You will also describe your competition and how you'll position yourself to provide your product in some unique way to your chosen market. Finally, the financial section contains your income and cash flow statement, balance sheet and other financial ratios, such as breakeven analysis. This part may require the assistance of your accountant. Most business plans are actually broken down into about seven different major components:
Usually, a cover, title page and table of contents are also included in a formal business plan. The following pages of this chapter will detail the various aspects of your “starting a successful” small business plan. Now, let’s get started. Information from Rieva Lesonsky's Start Your Own Business Web page and Starting Your Own Small Business Course by Paul Susic MA Licensed Psychologist Ph.D. Candidate CEO/President Susic Psychological Consulting P.C.
|
|
A
formal business plan is the next step in your successful new small
business journey. Why is it so important? Just as you would not head
out on a trip without a map into a new territory that you have never
been to before, you should not begin a new business venture without a
business plan. You need to do the necessary thinking, research, and
background required for a plan, before you begin spending money or
obligating yourself financially or making time commitments to a new
business without fully understanding the direction it is headed, and
whether it truly has potential for success. According to a study
conducted by AT&T, only 42% of small business owners bother to develop a
formal business plan; of those who did use a plan, 69% said it was a
major contributor to their success. |
|
|
|