A success tool
Oxygen. Money. Done! Any questions?
Success in business comes as a result of planning, and if you were to ask successful business people what do they attribute the reason for their success to, the answer you would get more often than not is: having a detailed, written plan that outlines their ultimate objective; the reason for that objective; and each goal (milestone) that must be reached and surpassed in order to achieve the final objective. In other words, the answers you get would consist of some variation of a business plan.
A business plan is the written definition of, and operational plan for, achieving your goals and objectives. You need a complete success tool in order to define your basic product, income objectives and specific operating procedures; but most importantly, if you’re going to need start-up capital, you must have a business plan in order to attract investors, to obtain financing and to keep the confidence of your creditors after you’ve secured that financing, especially in times of cash flow shortages – money you have on hand compared with expenses that must be met.
Aside from an overall directional policy for the production, sales effort and profit goals projected for your product or service (your basic “travel guide” to business success) the most important purpose of your business plan will be to serve the basis or foundation of any financial proposals you submit. Many entrepreneurs are under the mistaken impression that a business plan is the same as a financial proposal, or that a financial proposal constitutes a business plan. This is just a misunderstanding of the uses of these two distinctly separate business success aids.
Success aids
– The business plan is a long range map to guide your business to the objective you have set for it. The plan details the what, why, where, how and when of your business, or more simply put, the success planning of your company.
– Your financial proposal is a request for money based upon your business plan – your business history and objectives.
– Understanding the differences between these two success aids is very iomportant in the sense that, they are closely related, but they are not interchangeable. What is important to understand is this: Writing and putting together a “winning” business plan takes study, research and time, so don’t try to do it all in just one or two days.
The easiest way to start is with a loose leaf notebook, plenty of paper, pencils, a pencil sharpener, and several erasers so that you get yourself in the best preparatory mode as possible, because once you get yourself “in gear” and begin thinking about your business plan thoughts and ideas will begin racing through your mind at the rate of 10,000 thoughts and ideas per minute. In fact, when you are not actually working on your business plan, it’s a good idea to carry a pocket notebook and jot down any additional thoughts and ideas as they enter your mind.
Such ancillary ideas relating to sales, promotion, distributor recruitments, and such other thoughts on how to operate and/or build your business will come in very handy in the structuree and completion of your overall project. The value of such adjuvant notes becomes more evident later, when you resume actual work on your business plan, take out the idea notebook and evaluate your notes. Simply rework them, refine them, and integrate them into the overall project of your business plan.
The format
Keep in mind that the best business plans for even the smallest businesses often consists of about 25 to 30 pages or more, so you will need to title each page and arrange the different aspects of your business plan document into chapters. Your format should pretty much resemble the following:
- Title Page
- Statement of Purpose
- Table of Contents
- Business Description
- Market Analysis
- Competition
- Business Location
- Management
- Current Financial Records
- Explanation of Plans For Growth
- Projected Profit & Loss/Operating Figures
- Explanation of Financing for Growth
- Documentation
- Summary of Business & Outlook for The Future
- Listing of Business & personal References
This is a logical organization of the information every business plan should consist of but, for the sake of clarity, each of these chapter titles will be explained in greater detail as you continue through this article. It is important at this juncture, however, to elaborate on the reasons for proper organization of your business plan.
Your business, your plan
Having a set of questions to answer about your business forces you to take an objective and critical look at your ideas. Putting it all down on paper allows you to change, erase and refine everything if it is to function in the manner of a well-oiled machine… so to speak. You will be able to spot weaknesses and strengthen them before they develop into major problems; and overall, you will be developing an operating manual for your business. This operating manual must be seen as a valuable tool which will keep your business on track, and guide you in the profitable management of the company you’ve built for years to come.
Because it is your idea and your business, it is very important that YOU be the one to do the planning. This is YOUR business plan, so YOU develop it, and put it all down on paper just the way YOU want it to read. Seek out the advice of other people; talk with them, listen to them, and observe other people running similar businesses. You should also solicit the advice of your accountant and attorney, but the bottom line is that, despite who you consult with, you must never forget it has to be Your Business Plan!