The Benefits of a Business Plan
A business plan is important for any business.
Being an entrepreneur requires the need to constantly make decisions. Being a successful entrepreneur requires constantly getting most of those decisions right. No entrepreneur gets every one correct, just ask Tiger Woods. Besides, if that was to happen it would be boring. However, being an entrepreneur does require bringing your A game to your business as much as possible.
Different types of business plans
One of the best tools that enable entrepreneurs to be successful is creating and working a business plan.
In simple terms, there are two types of a business plan. The first type of business plan is for a brand new business or start-up that is getting ready to be in business.
A new business or enterprise requires a different approach to an existing business as there is a lot of data gathering and initial research to build and make decisions. Additionally, there are a lot of one-offs to attend. This includes researching and deciding the best legal entity, setting up and creating a proper set of financial records, knowing what business licenses, permits, and other regulatory requirements need to be met. It also includes creating job descriptions and hiring the right people for those positions, researching technology options, buying the right equipment, getting it set up correctly including any necessary training and the list goes on.
The second type of business plan is for an existing business. This business plan is probably much easier to create than a business plan for a brand new enterprise, as the business plan should have a basic structure or set of foundations that can form the basis of the business plan. If the business does not have this then consider using the business plan for a new business with one of the first things to create is an organizational chart of the management and support team including their job title and description. If current employees are in place with these positions, have them write the job description and then review to make sure it corresponds to what you expected the position to be doing. Now take this job description and see if it fits into the business plan. If it doesn’t, you have some changes to make, probably including re-training.
Free business plan template
If you need sample business plan templates to help you get this critical task started, please visit my website and go to the sample documents tab. There are over 20 free documents available for you to download and use and these include templates of a business plan for a new enterprise as well as an existing business.
As you create the business plan keep the following in mind. Is there an ultimate reason for the business plan? If the business needs to obtain finance then almost without exception, the lender will want to see a business plan so they can understand the current operation of the business and its success and why and how any money being lent will be used.
Work your business plan
The best practice is to create a business plan and review it annually. This is because the business plan keeps you honest. It forces you, as the entrepreneur, to have a vision for your business and make sure that vision is realistic and achievable. Additionally, a business plan tends to be a static document. Once it’s created it is easy to forget about.
This is a mistake as the business plan is generally built over a period of time. With time comes clarity of thought and purpose and so the business plan provides an anchor for the business and allows the business to be set up so it weathers all four seasons. This is the beauty of the business plan. It allows you to review why you set out in the direction that you did and what benchmarks and measurements you made to determine if you were and are successful. If you are not as successful as you planned, what adjustments do you need to make to get the results that you need?
Other ideas to keep in mind as you build your business include the need to keep financial projections real. A budget is a mandatory document to include with a business plan as it rounds out the strategies and tactics for the business and supports them with a financial snapshot. Another suggestion is to write the business plan as if the reader knows nothing about the business. Include jargon if you need to but too much jargon will make the document irrelevant to the reader who doesn’t talk your talk.
Finally, keep the business plan precise, clear and professional. It’s not the place to rant and rail to explain your management style and it’s not the place for humor. This is a business document and reflects what the business is all about. Each reader brings their own perceptions and preconceived ideas. If the business plan is confusing you may lose the support of a reader that could mean the difference between the success or failure of the business.
With the Business Plan follows the need to create a supporting Sales and Marketing Plan that identifies how the business will attract customers and therefore revenue.
Part 5 of this article series covers how to put together a Sales and Marketing Plan.