Success in business comes as a result of planning. You have to have a detailed, written plan that shows what the ultimate goal is, the reason for the goal, and each milestone that must be passed in order to reach your goal. A business plan is written definition of, and operational plan for achieving your goal. You need a complete but success tool in order to define your basic product, income objectives and specific operating procedures. YOU HAVE TO HAVE A BUSINESS PLAN to attract investors, obtain financing and hold onto the confidence of your creditors, particularly in times of cash flow shortages- in this instance, the amount of money you have on hand compared with the expenses that must be met.
Aside from an overall directional policy for the production, sales effort and profit goals of your product–your basic “travel guide” to business success — the most important purpose your business plan will serve, will be 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 separate and different business success aids.
The business plan is a long range “map” to guide your business to the goal you’ve set for it. The plan details the what, why, where, how and when, of your business — the success planning of your company.
Your financial proposal is a request for money based upon your business plan — your business history and objectives.
Understand the differences. They are closely related, but they are not interchangeable. 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 with a loose leaf notebook, plenty of paper, pencils, pencil sharpener, and several erasers. Once you get your mind “in gear” and begin thinking about your business plan, “10,000 thoughts and ideas per minute” will begin racing through your mind. So, it’s a good idea when you aren’t actually working on your business plan, to carry a pocket notebook and jot down those business ideas as they come to you — ideas for sales promotion, recruiting distributors, and any other thoughts on how to operate and/or build your business.
Later, when you’re actually working on your business plan, you can take out this “idea notebook” evaluate your ideas, rework them, refine them, and integrate them into the overall “big picture” of your business plan.
The best business plans for even the smallest businesses run 25 to 30 pages or more, so you’ll need to “title” each page and arrange the different aspects of your business plan into “chapters.” The format should pretty much run as follows:
Statement of Purpose
Table of Contents
Current Financial Records
Explanation of Plans For Growth
Projected Profit & Loss/Operating Figures
Explanation of Financing for Growth
Summary of Business & Outlook for The Future
Listing of Business & personal References
This is a logical organization of the information every business plan should cover. I’ll explain each of these chapters titles in greater detail, but first, let me elaborate upon the reasons for proper organization of your business 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 to function in the manner of a smoothly oiled machine. You’ll be able to spot weakness and strengthen them before they develop into major problems. Overall, you’ll be developing an operating manual for your business — a valuable tool that will keep your business on track, and guide you in the profitable management of your business.
Because it’s your idea, and your business, it’s very important that YOU 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, listen to, and observe, other people running similar businesses; enlist the advice of your accountant and attorney — but at the bottom line, don’t ever forget it has to be YOUR BUSINESS PLAN!
Remember too, that statistics show the greatest causes of business failure to be poor management and lack of planning — without a plan by which to operate, no one can manage; and without a direction in which to aim its efforts, no business can attain any real success.
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Steven Presar provides news and articles regarding starting or maintaining a small business: http://www.Agora-Business-Center.com He also works with individuals and small business owners who would like to grow their business on the Internet: http://www.Alliance-Internet-Marketing.com