Have you had plans since way back when to become a business owner? If that’s the case, then you’ll need to have a business plan?
But what exactly is a business plan, you might ask?
Well, written descriptions of the business you’d want to have is what’s known as a business plan. Simply put, it is a document which describes your plans and how to do them. If you write down a few notes which describe your business strategy on the back of a receipt, then you now have a plan, albeit something that looks a bit “informal.”
Your business plan could help you in doing tasks. These plans are utilized by business-minded individuals in order to convey what they have in mind to their potential investors. These plans might also be utilized by enterprises that are attempting to attract employees, prospects for new business deals, deals with various suppliers or to simply understand how these individuals can better manage their businesses.
So, what exactly is included in a plan such as this? Plus, how are you going to create one? To put it simply, your business plan will convey what your goals are for your business, the strategies that you’ll be using in order to achieve them, the possible problems that might be encountered along the way plus the ways you can solve them, your business’ organization structure and, finally, how much capital you’ll be needing in order to finance the venture as well as keeping it going until your business breaks even.
Sounds promising, right? It can definitely be if you properly put it together. Good business plans usually follow accepted guidelines with regards to both form as well as content.
The three main parts of a business plan include the following:
- Business concept – This is the part where you talk about the industry, the structure of your business, the specific product and/or service you offer as well as how you’re planning on making that venture of yours a success.
- Marketplace – This is where you both describe and then analyse your potential customers as to who they are, where they are and what makes them purchase certain products and services, among others. It’s also here where you describe your competition and how you’re going to position yourself in order to gain the upper hand.
- Finance – This contains the income and cash flow statements, balance sheets plus the other financial ratios, like the break-even analysis, for example. This section might require that you ask help from an accountant who can properly work electronic spreadsheets.
Updating that business plan of yours is also of paramount importance and here’s why:
- New financial periods are about to start. You’ll need to updates plans on a regular basis in case you’re in an industry that’s fast-changing.
- You’re going to need finances. Your lenders plus your other financiers will need updated plans that can help them when it comes to making financing decisions.
- Significant market changes have been happening – Changing customer preferences, shifting regulatory climates and trends among clients can set off plan updates.
- Your business if developing or is about to develop new products and/or services. In case that venture of yours has undergone changes since you’ve first written your plan down, then it’s time for you to update it.
- You’ve had management changes. Your new manager ought to receive fresh info regarding your venture as well as your goals.
- Your business has gone beyond the threshold, like moving your base of operations, adding another branch, getting more deals, etc.