Create a Business Plan and Flourish !
If you require funding for your business you are going to need to create a business plan.
And to prove that you are going to spend the banks money in a way that they see is planned, fair and organized.
You must prove that you know where you are heading, in great detail.
However the real reason every business owner must operate with a plan is because without one you are simply treading water.
This is why it’s so important to create a business plan.
1. Discuss the Primary Objective of your Business
This should be a short paragraph at the beginning of when you create a business plan.
It should outline your overall intention for the business, or your mission statement.
Do not bluff or overdo your mission statement when you create a business plan. Keep it clear, short and concise.
2. Form a Summary of your Plan
Describe each section of your business so that it is clear in your mind just how this business will run.
Be sure that when you create a business plan, you start off with the summary because this helps you the most.
It should include where your idea came from, what you intend to give to your customers, how you intend to produce it.
Market research, market strategies and funding should be briefly explained in this summary.
3. Gather a Brief Description of your Business
Here you intend to describe the core activities of your business, name and details related to it.
Again, this should be brief when you create a business plan.
You must mention whether its new or established, where it’s located (or planning to be located) and what structure you’ve chosen for this business and why.
4. Perform the SWOT Analysis
Strengths, Weaknesses, Opportunities and Threats analysis is key when you create a business plan.
This is where you outline your strengths and weaknesses as a business and opportunities and threats outside the business.
Under each heading, use bullet points to outline your advantages and disadvantages and be completely honest; especially when considering your weaknesses as a business or individual and what will threaten your business.
Only by being honest in these areas can you identify which areas of your management ability and the business requires the most attention.
5. Form the Necessary Market Strategies
Your marketing strategies must include answers to the following questions. Customer Service, Promotional Literature, Advertising, Location, Website, Online Advertising, Unique Selling Position/Competitive Advantage etc. are some of the points that need to be answered in the marketing strategies.
6. Evaluate the Capital Needed for the Set Plan
This includes how you intend to sell each month/year and how are you going to fund your working capital each week/month until you are paid.
Outline in words how you intend to do this by breaking down your estimated profit per month and your estimated working capital requirements.
Also determine how you will pay for your operating and advertising costs until you begin to see profit.
All this is necessary when you create a business plan since this adds a certain amount of certainty to your plan in general.
7. Understand the Possibility of Growth and Development
This is the most crucial part when you create a business plan as this will determine whether your business grows with market trends and whether you have the ability to consistently give your customer what they want as your customer base grows.
Be very, very specific throughout this section to create a business plan.
Include management processes, financial position, marketing and advertising etc. in this section.
8. Analyze the Financial Requirements
It is vital to assess total funds required to set up a business. And also cover its operating costs until it becomes profitable.
At first glance, it may appear that all that is required is stock, basic fixtures and perhaps the first month’s rent.
However, there are many other costs and expenses in starting a business and you should consider every possible expense.
You are simply going to pinpoint what your exact expenses will be and whether your funds will support your expenditure when you create a business plan.
9. Estimate the Projected Profit or Loss
Now that you have outlined your expenses, you can project your profit for each month of the year and establish your profit or loss.
When estimating your profit, it is important to be realistic about what you are going to sell. Work on minimal figures to be safe.
To calculate your projected profit and loss simply add all outgoings for the first year to establish your required capital (this will include all direct or initial set up costs).
Subtract your outgoings from your incomings and there you have your estimated profit or loss.
Cash flow shortages can arise from customers not paying on time or from an over order of stock etc. So you must understand that your projection is only a projection and is prone to fluctuation when you create a business plan.
The final aspect to when you create a business plan is the administration.
This tells you what records are to be kept and what aren’t necessary. So all this information must be entered when you create a business plan.
How the mentioned records are to be kept should also be clearly mentioned in this section of your business plan.
You need to create a business plan before starting a business.
It doesn’t have to be long and complicated.
All you must ensure is that it is clear, simple and gives you and your investors the complete idea about your business. The business plan should also be worthy to be run in this world.
You can find me cooking up new ideas to keep myself occupied since I hate staying idle.
I also hope that one day I write something worth plagiarizing 🙂