A business plan is an outline or blueprint of the business, one hopes to establish. Business plans are important for any successful organization. They have been used by thousands of companies to chart the course of their success as well as provide a road map for further development. A well-prepared business plan can be the difference between success and failure. This article discusses the benefits of a well-prepared business plan.
Many companies start with a great business plan that outlines their mission, marketing plan, financial forecast, and executive summary. However, a great business plan goes much further than that. In fact, a great business plan often includes a detailed description of the company’s competition, strategies to counter their strength, and how to capitalize on unique market opportunities.
In addition to a detailed description of the competition, a good business plan should also include a complete financial projection. This includes not only sales and gross profit, but also an estimate of the cash flow needed to run the business. A financial projection should take into account any investment needs such as equipment and facilities, inventory, and capital expenditures. It may even include estimates for future years’ sales and profits.
In addition to a financial projection, a well-prepared business plan will require the creation of a marketing strategy, a business plan to attract investors, and a description of the business process. These are the tools of successful marketing and will vary according to the type of small business, one wishes to start. Each tool has its own purpose, and a business plan should discuss each in sufficient detail.
Writing good business plans requires a good idea of the customer base and their needs. Some companies create an executive summary that includes their mission and goals, their services or products to be offered, and key personnel. Other companies simply provide an executive summary with a business plan that discusses in detail how the company will obtain the capital it needs to start and operate. Regardless, of whether the company chooses to include an executive summary or not, both documents are extremely valuable to potential investors.
Writing good business plans is the first step towards creating a profitable business. Any investor will want to see a complete list of potential funding sources. This is especially true when the company is in the early stages, where most banks have no history of providing investment capital. A well prepared executive summary will provide a complete listing of potential investors as well as a marketing strategy to attract them.