A business plan is an essential road map for business success. This document generally projects 3-5 years ahead and outlines the route a company intends to take to grow revenues in the future. A well-written business plan can mean the difference between success and failure — not only when it comes to securing capital, but also as it relates to actually running your company.
Why to make a business plan
A business plan is a written document that describes your business. It covers objectives, strategies, sales, marketing and financial forecasts. A business plan helps you to clarify your business idea, spot potential problems, set out your goals and measure your progress. You’ll need a business plan if you want to secure investment or a loan from a bank. It also provides a clear picture of your planning to your customers, suppliers and potential employees.
What to consider before making a business plan
1. How Long Should Your Plan Be?
2. When Should You Write It?
3. Who Needs A Business Plan?
4. Why Should You Write A Business Plan?
5. Determine Your Goals and Objectives
6. Outline you Financing Needs
7. Plan what you'll do with Your Plan
8. Don’t Forget About Marketing
What to avoid in your business plan
Place some reasonable limits on long-term (over one year), future projections. Better to stick with short-term objectives and modify the plan as your business progresses. Too often, long-range planning becomes meaningless because the reality of your business can be different from your initial concept.
Avoid optimism. In fact, to offset optimism, be extremely conservative in predicting capital requirements, timelines, sales and profits. Few business plans correctly anticipate how much money and time will be required.
Avoid language or explanations that are difficult to understand. Do not ignore spelling out what your strategies will be in the event of business adversities.
Don't depend entirely on the uniqueness of your business or even a patented invention. Success comes to those who start businesses with great economics and not necessarily great inventions.
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