Business Planning What are the Benefits?
By Timothy Faley, Ph.
Some entrepreneurs view the business plan as a to-do list item that must be checked off before meeting with banks, angel investors, or venture capitalists can be scheduled.
While investors will want to see your plan, the business plan is first and foremost your business's operational document. It should lay a solid foundation upon which your business can be built, and should be treated as a living document -- one that grows and changes with your business.
Many books and articles have been written on writing business plans. Key questions some of which you answered when you determined the feasibility of your idea that you'll need to address as you prepare your plan are: Is your primary market research conclusive and substantial?
Do you understand the nature of the competition now and in response to your success? Have you built a dynamic financial model that conveys the impact of critical assumptions in your plan?
Have you identified operational milestones? Are key managers and board members identified, "lined up" or in place?
Elements of the business plan Once you have sufficiently answered the above questions, you can move on to putting your idea to paper in a business plan. Sections of the plan should include: Executive Summary -- This summary provides a condensed overview of your company and where you'd like to take it.
It often is the last section written, since it is based on the details you've provided in the rest of the business plan. Company Description -- Describe your company, product, competencies, and market needs being satisfied. Market -- Identify and quantify your initial target markets. Industry and Competition -- Include the current status and anticipated competitive response.
Products and Services -- Address intellectual property protections and the status of product development.
Marketing and Sales -- Encompass issues of product, price, promotion, distribution, and sales cycle times. Operations -- If nowhere else, illustrate here WHAT your company does and list vital value chain relationships.
Ownership and Management -- Detail key additions to the team; legal structure of the business and board memberships. This section is the narrative of your planned financial performance.
The executive summary will be the most read of all of the sections of the business plan. Expend the effort to ensure that it is articulate and succinct while still describing the unique essence of your business. Spend the time to understand assumptions regarding marketing and sales.
Revenue growth and timing are difficult to predict, yet extremely important to your venture's success. Whatever proxy you base your sales forecast upon, it must be rational, specific, and measurable.
You most definitely will have to defend it to your financiers. You will absolutely need to closely track and validate these assumptions when you actually launch your business. The launch phase The business launch phase is about marshaling the resources you need to launch your business and validating some of your assumptions through your early operational experience.The Income Statement is one of the three financial statements that you need to include in the Financial Plan section of the business plan.
The Income Statement shows your revenues, expenses, and profit for a particular period. B. Financial Projections - The financial projections you provide with your business plan and loan proposal should be complete, but more importantly, realistic.
Do not maie the mistake of attempting to make the projections rosy.
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Everyday low prices and free delivery on eligible urbanagricultureinitiative.coms: 10 Steps to Turnaround a Struggling Business. When your business is in trouble, you'd better have a plan!
Don’t think you have time to write a great plan? Tough!
and cutting expenses is a good way to buy “financial” time. You might want to create a break even analysis or even a proforma income statement to help you determine the. In this section of the business plan, you should write a two to four paragraph biography about your work experience, your education, and your skill set.
For each owner or key employee, you should provide a brief biography in this section. A fantastic plan for presenting reports, overviews, development plans, and financial planning. The template features unique slides and PPTX files.
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