Stop Sweating a Business Plan

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Writing a business plan becomes a major stumbling block for many new entrepreneurs. They read all the articles, books, blogs, and other drivel about importance, formats, contents, “do this–don’t do that” stuff, and then stress out about writing a formal business plan.

If you are someone worried about writing a formal document…consider this:

“I have always found that plans are useless, but planning is indispensable.” –Dwight D. Eisenhower

The point I want to make here is that for the great majority of the 6+ million new businesses that will startup this year…a planning “document” is not necessary and is a waste of resources. At the same time, however, “planning” is absolutely necessary for every single one of them.

Having said that, I am well aware that if you are expecting to start a high-tech company to knock off Google or Facebook, you will need lots of venture capital, and VCs require a very formal and expansive business plan, as well as a top-notch presentation (should you get that far).

But these “darlings” of the startup world are only a small percentage of all the businesses that will be created this year (and every year). If you are reading this article, and hoping to start a business, it is highly unlikely you will need to write a formal business plan.

You will, however, need to do some pretty detailed, “planning.” The purpose of this planning is to develop a fairly detailed strategy that you will continually modify as you move ahead.

Here is what you need to include in your strategy planning:

1.) A Strategic Outline. You need to understand what your strategy is going to be to build your business. This outline only needs to be complete enough to manage your business–no one else (other than your advisors) is likely to every see it.

2.) Work Out the Basics. You will need to clearly understand your market, and do whatever market research is necessary to accomplish that. You will also need to develop forecasted revenues, and detailed expense estimates…both to start your business and to operate it. And, of course, the most important of all-you will need to determine how much money you will need to start your business.

3.) Use Your Resources. You should have an advisory board, or group, assembled to assist you through this planning process. A good advisory board can mean the difference between success and failure of your business–so use them, especially when planning your startup.

4.) Never Stop Planning. The less formal you make your planning, the easier it will be to make frequent changes to it, based on your on-going experience with the business. Updating your planning frequently also provides the opportunity for you to review your thinking and see how that has changed since you first started.

So, in essence, don’t sweat the thought of writing a mighty tome about your business idea (unless you are looking for venture capital), but be sure to do a thorough job of “planning” your business. Remember, you are always planning, and how you record your business planning is strictly up to you. Cocktail napkins, whiteboards, butcher paper, etc., are all fine.

Writing a Business Plan

If you are in the process of starting a business or considering expanding an existing business, most advisors, and books written on the subject, say you must have a Business Plan. You may be doubtful given that it means you need to take precious time out of your busy schedule to put your plans on paper.

But do you really need a Business Plan?

A survey carried out on 400 UK entrepreneurs by SimplyBusiness revealed that 54% of business owners don’t have a Business Plan. Shocked? I was. Based on my experience when dealing with both start ups and seasoned business owners I thought the figure was on the low side! Only 54%?? Come on. I can count on one hand the number of business owners who have a Business Plan.

So, is a Business Plan as essential as we’re led to believe? Can you build a business without one?

What’s the Answer?

The simple answer to these two questions is… yes.

Yes, a Business Plan is essential; and yes, you could still build a successful business without one, but the unknown aspect is, could you have been even more successful if you had written a Business Plan?

You’ll never know but perhaps now is the time to think again.

Perhaps you are not sold on the idea that all the effort required to prepare a plan is worthwhile. If this is you let’s consider 5 key benefits for you and your business.

Feasibility and Viability

Taking time out to write a Business Plan will assist you in assessing the feasibility and viability of your idea. You may assume that sitting back and planning your future empire in your head is going to cover all the aspects of your business. Maybe, but the process of writing your thoughts down on paper will bring to the fore all the risks and potential pitfalls you hadn’t thought of. A Business Plan forces you to put your ideas down in writing and in an orderly manner. The result of this could be you going in the opposite direction or even dropping your idea altogether. Not a pleasant thought, but which would you prefer? Losing your capital or the chance to re-consider your idea?

A Measuring Tool

A Business Plan is an ideal means of monitoring your progress against the objectives you set yourself. By checking the progress you are making against your Plan you’ll be able to quickly identify if you are drifting from your original vision; know this and you will be able to take corrective action.

Consider if you didn’t have this check in place; a slight change in direction, if not spotted or left uncorrected for too long, could be damaging to your business. On the other hand, it may be that a swing from your original vision would be a more profitable alternative, one which may not have come to mind before. At least with a Business Plan you have given yourself the choice.

Get the Numbers Right

Do you really know with 100% certainty how much money you’ll need? Have you covered all the possible financial eventualities? It’s difficult to answer yes to this question if you don’t have a Business Plan.

A Plan will challenge you to consider whether you have the correct amount of funding needed to make your idea work. You may have a rough estimate of the funding you require, but until you prepare your Financial Forecasts you may not realise that a few extra thousand is needed.

Helping to Get the Bank on Your Side

One of the key reasons why banks don’t support requests for finance is lack of information. If your manager doesn’t have a good enough ‘feel’ for your idea or business then you are giving the bank every reason to say no.

A Business Plan will make the bank feel much more comfortable about the risks they are being asked to take. Without information to balance out the pros and the cons it would be easier for the bank to say ‘no’ and move onto the next request. By investing time in preparing a plan you are improving your chances of success of getting support from your bank.

A Business Plan Can Say it Better Than You Can

Not everyone has a smooth way with words and sometimes even the best communicator’s need the back up of the written word. No matter how good a presenter you are, it’s unlikely you will be able to convey your vision as clearly as a Business Plan. Too often a business owner will try to sell their idea to their bank or a potential investor and at the end of the session the manager is none the wiser than he was at the start. A Business Plan leaves little or no room for misunderstandings.

You should now realise that it’s essential to have a Business Plan; it may be the difference between success and failure! It’s all about understanding the importance of planning ahead. Invest time putting your plans on paper because it will pay you dividends in securing the funding you need and the future success of your business

A Guide to Writing a Business Plan

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Understand the Concept of a Business Plan

Undoubtedly, putting together and implementing a proper business plan is one of the most important aspects of starting a new business. By doing this, you will be able to easily set targets and goals, formulate and implement ideals, verify realistic and functioning approaches to the business, and push towards the long-term success of your particular writing a business pland.

This essential tool works to attract the startup funding for your business. The document needs to be dynamic, jumping off the page at potential investors.The document also needs to be reviewed and monitored regularly to measure the overall performance of the business.

This guide will explain various aspects of what your business plan should include and how you should formulate one for yourself. Various strategies laid out in this guide will be vital to the proper formulation and implementation of a business plan. This is aimed directly at startup businesses in need of fundraising, but the message is valid to all businesses.

Benefits of a Well Formulated Business Plan
This business plan is primarily for your business partners. Some of the things it can help you to do include: Bringing research and ideas together into a well-structured, professional format

# Deciding when and/or if your business is commercially viable

# Clarifying your businesses goals and communicating this to staff and business partners

# Predicting future business scenarios and potential pitfalls in order to address them before they threaten your business’ success

# Laying out a strategy for your business

# Setting different objectives and targets, which include financial targets

# Enabling you to watch your business’ performance carefully and regularly

The Best Way to Approach the Plan
It is essential that any investor understands your business’ agenda if the purpose of the plan is to ask an investor’s financial support. Any and all investors need to be ensured that your business will profit, therefore, a good business plan will clearly list your objectives.Read any published literature from a body you are approaching so that it is easy to identify objectives, thus making it easy to demonstrate how you will meet them in the business plan.

For instance, if you’re reaching out for a grant or loan, it’s important that you understand where your business fits into the financing. Your plan should illustrate to funders how you plan to start and operate a profitable business. It is also essential that your plan stand out above the rest of the mundane plans out there. You need to be comprehensive, concise, and complete in your plan, without making contradictions. You need to always check that any figures you include in the plan add up.

Any irregularities will leave potential investors fleeing your business. Your plan needs to be credible.Identify what your audience wants to know about your business. It is important to be honest in this aspect of business planning. Make sure you include details such as why your business is located in a particular area, why you’re targeting a certain audience, etc. These plans need to be as realistic as possible and convince investors that your business is worth their dime. Make sure you provide a way to back up any claims you’re making.