The Do's of Developing Your Business PlanA business plan is more than just documentation your lender requires for financing. Your business plan is like a blueprint for long-term success, as it gives you a written breakdown of your goals, strategies, and the conditions your business is operating under.
Luckily, your plan doesn’t have to be a huge binder filled with complex papers. The overall design of your plan just needs to address things that will have an impact on your business, and what you’re going to do to handle those factors. Of course, given the fluid nature of business, your plan is always subject to change and review. Don’t be afraid to get a second opinion on your plan from a person whose knowledge is sound or your company’s accountant.
All business plans should cover the bases, so take a look at the following key components yours should address for the most well-rounded approach.
What Your Business Involves
A strong business plan provides a thorough overview of what’s involved in the business, including the following:
• Business goals and strategies
• All schedules
• Margin of profit
• Cash flow
• Equipment selection and maintenance
• Runs of production
You’ll also need to determine your direct competition, and what your business is going to do that will make you stand out from those other companies. Your edge may include the products or services themselves, warranties, the quality, your prices, contract terms, your customer service or the delivery, including method and time.
Your Market in a Nutshell
The conditions you're operating under directly influence the success and failures of your business. Ask yourself and answer the questions below as part of your plan:
• What is the potential market size?
• Is the market growing?
• What influences the market the most?
• What are the market and my product’s life cycles?
• Who are my customers, now and in the future?
Don't Forget Your Goals
Both long and short-term business and personal goals influenced by your company can be a part of your plans.
A short-term personal goal list may, for example, read as follows:
• I will take a week-long vacation each year.
• My family must be taken care of financially if something happens to me.
• Within one year, I will have the same salary I would pay a manager.
The list for long-term personal goals would touch more on the distance future, as shown below:
• Within ten years, my company should be worth $1 million.
• By the time I am 50, I want to have money available for traveling.
• I will have a retirement plan set before I actually retire.
Business goals are centered on your company instead of you entirely. A short-term and long-term business goal list, for instance, could read in part as shown:
• My company’s pre-tax profit must stay above $500,000 before the five-year mark.
• Gross profit must be above 33 percent, in spite of increasing costs.
• I will find and train a new manager to take over daily business concerns within ten years.
• I will lessen the company’s dependence on our most popular service by introducing new services.
There are no hard and fast answers here, as each business type and market has its own specific sets of needs and factors. You'll also have to be prepared to alter your business plans as circumstances dictate for the best results.
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