Reason Why People Should Think About Business Plan

Small business or corporation it doesn’t matter. No matter how small or how big your business, a good enterpreneur must think about business plan. Skill to make a good business plan depend on the fact can be a measurement for you as the enterpreneur. How ready you are to face rival or the other enterpreneur with a huge risk that already wait you in front. Business world is a world full of risks and and a bravery to take all that risks is the first thing for every enterpreneur. But, bravery is not enough, you should have skill to analyze the condition around you, because if you can’t analyze the situation around you its equal with an enterpreneur who ready to fall down and failure.
A business plan is like a roadmap. It allows you to plan out the various aspects of your business on paper, and keeps you from making unnecessary mistakes later on. It helps an entrepreneur think about the costs associated with starting a business and show banks that you are serious about your idea. A Business Plan helps you evaluate the feasibility of a new business idea in an objective, critical, and unemotional way. It provides an operating plan to assist you in running the business and improves your probability of success.

Identify opportunities and avoid mistakes :

  • Develop production, administrative, and marketing plans.
  • Create budgets and projections to show financial outcomes.
    It communicates your idea to others, serves as a selling tools and provides the basis for your financing proposal.
  • Determine the amount and type of financing needed.
  • Forecast profitability and investor return on investment.
  • Forecast cash flow, show liquidity and ability to repay debtWriting a business plan will take your time.

So here is the step how to write a business plan :

A typical plan will have three sections. Section one is a written section describing Management and Marketing aspects of the business. Section Two includes financial projections. Section Three is supplemental information. A short (3-5 pages) Executive Summary is often added at the beginning of
more complex business plans.

  • Section One should be thorough, but concise and to-the-point. Use headlines, graphs and “bullets” to improve readability. Length of this section is usually 10 – 20 pages.
  • Section Two describes in numbers the outcome of your business strategies and plans. Your financial projections should be based on facts and research, not “wild guesses.” Be prepared to justify your numbers.
  • Section Three contains supporting information to reinforce the first two sections. This section’s contents will vary with your type of business.

Owners should be very involved in the planning process. Hiring someone to do it or delegating it to someone who is not a key member of the company will result in an inferior plan. No plan (or a poor plan) is a leading cause of business failure. You can improve your chances of success with a good Business Plan.

Outline to make a business plan is simple, the first is description of the business provides an overview of key information which is developed in greater detail in the following pages. The second is tell about your product, describe your product offering. This will include details of product
features and an overview of unique technology or processes. But don’t stop there and don’t focus too much on technology. You must also describe the product benefits and why customers will want to buy. The third is market analysis, market analysis is important as the basis for the marketing plan and to help justify the sales forecast. Existing businesses will rely heavily on past performance as an indicator of the future. Fourth is location, locations with greater customer traffic usually cost more to buy or rent, but they require less spending for advertising to attract customers.

This is especially true of retail businesses where traffic count and accessibility are critical. Fifth is your competitor, you should know “Who is your competitor?” is one of the first questions a banker or investor will ask. Business by nature is competitive, and few businesses are completely new. If there are no competitors, be careful there may be no market for your products. Last is management and operation, Because management problems are the leading cause of business failures, it is important to discuss management qualifications and structure. Resumes of Principals should be included in supporting data. If your business will have few employees and rely heavily on outside professionals, list these key people and their qualifications. If you are seeking financing, include personal financial statements for all principals in supporting data section.

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