A clear business plan will allow you to focus on your goals and take opportunities as they present themselves. Here, we cover the basics of what your business plan should encompass. Why a business plan is crucial to success Even the greatest thinkers need to write their ideas down to get the most out of them. Purpose of your plan Your business plan should have three main purposes:
Find environmental programs and resources that could help improve your business.
E-business strategy Effectively using information technology is an important part of managing a business. In this section, you should outline how you plan to use internet technologies to reach customers, manage your business, and reduce costs.
You should include information about: Discover some of the many ways you can use information communications technologies to your advantage.
Financial forecasts and other information This section of your business plan essentially turns your plans into numbers. As part of any business plan, you will need to provide financial projections for your business.
Your forecasts should run for the next 3 to 5 years. However, the first 12 months' forecasts should have the most detail, including assumptions both in terms of costs and revenues, so investors can clearly see the thinking behind your numbers.
As you put your plans down on paper, remember the importance of thinking objectively. Analyzing your venture from three points of view — optimistic, pessimistic, and realistic — can give you a solid idea of what to expect as you move forward. Your financial forecasts should include: Include working capital, salaries and sales.
How much capital do you need, if you are seeking external funding? What security can you offer to lenders? How do you plan to repay any borrowings?
What are your sources of revenue and income? Your forecasts should cover a range of scenarios, and you should include the contingency plans you've developed to offset any risks. You can also review benchmarks and averages for your type of business and discuss your business' position.
Find out how your business measures up to others in your industry with this benchmarking tool. Early planning will give you the opportunity to consider all of your options, including strategies that may take time to implement. For example, if you plan on passing your business on to your children, you'll need sufficient time to train them and integrate them into your business.
As you prepare your exit strategy, you will want to ask yourself the following questions: When do I want to leave my business? What do I want to do with my business? Options include selling it, passing it on to a family member, or closing the business and liquidating its assets. How will I determine the value of my business?
How much money will I require to lead a comfortable life after exiting my business? Once you considered your options and set objectives, it's time to add an exit strategy to your business plan. Although you may not be exiting your business for some time, a solid strategy will be a roadmap to your future goals.
Find the right strategy for selling your business or handing it over to someone else.
Additional resources You'll want to thoroughly review your plan once it's done. Try to avoid using jargon — the person reading your plan may not understand your businesses as well as you do.
You can ask friends, family, associates, and mentors to review it. Don't be afraid to seek advice from professionals such as lawyers and accountants.
You may also want to consider hiring a professional proofreader to check for errors. Remember, your business plan represents your business, so you want it to be as professional as possible. Get answers to frequently asked questions and see sample business plans and templates.THE AUTHOR.
John Warrillow, the author of Built to Sell, is the founder of The Value Builder System™ where advisors help company owners increase the value of their regardbouddhiste.comusly, he founded Warrillow & Co., a subscription-based research business dedicated to helping Fortune companies market to small business owners.
Step 2—Prepare a winning business plan. Share.
Your business plan is a crucial document for your new company. It says who you are, describes your business and shows how you will become profitable. You can use BDC’s free business plan template to guide you as you write your plan. The Canada Business Network also offers a guide to writing.
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