A Good Business Plan Will Keep You on Track
You’ve got a great idea for a small business, and the longer you think it over, the more promising and profitable it seems. So what’s next? How do you take the visions in your head and bring them to life over the course of the next three to five years? Before you take another step, you need a business plan.
What is a Business Plan, and Why Do I Need One?
A business plan is a step-by-step roadmap that will outline exactly how you intend to set goals, build capital, and start bringing in revenue. As you move through each day, week and month of the next few years, your business plan will keep you on track and inform your decision making process at every turn. A functional business plan can also help others understand where you’re heading and how you intend to get there. This can be a very useful document as you attempt to build financial capital for your small business [3] by obtaining loans or attracting investors.
Your business plan will illustrate how you intend to promote your product to your target audience, how you plan to staff your company, how you’ll control costs and supply issues, and how you intend to generate and distribute your core product or service.
Elements of a Great Business Plan
Every business plan should devote some attention to each of the following areas:
- A company description
What exactly do you do? What do you create or provide and why is your target audience likely to respond? What sets your business apart from your competition? - An outline of your management structure
Who will handle each aspect of decision-making within your business? Outline how your company will be staffed and who will bear responsibility for what. - An overview of your financial projections
How fast do you intend to grow? How soon will your revenues cover your expenses? - The steps you’ll need to take to obtain funding
In order to apply for a loan or present your company to potential investors, you’ll need to plan every detail and assemble all the necessary documents, licensing, and certifications you need to assure your financiers that you’re headed in a profitable direction. - A marketing plan
Finally, you won’t make inroads among your target audience unless you know exactly who they are and how to reach them. Your marketing plan [4] can help you stay focused on your core clientele as you move forward.
Do you have experience writing a business plan? If so, please share any additional tips you have for our readers in the comments.