The majority of successful businesses have created a business plan at some point, usually before their start-up.
What Is A Business Plan?
A business plan helps you to address all of the major components to starting your business. It is essential to create one, as it makes you carefully think through the majority of the important parts your business will be built upon. Ideally, you will create a business plan BEFORE you start your business.
Why Create A Business Plan?
A business plan is generally prepared for two reasons:
1. To enable you to obtain financing for your business
2. To help decide if the essential parts of starting a new business have all been considered.
Often new business owners and even the more experienced ones will sometimes overlook certain aspects of starting a business, and one of the main things overlooked is the business plan. Although a business plan is often considered to be optional, they do serve a vital purpose to business owners setting up a business.
A good business plan will help to ensure that the majority, if not all of the possible questions have been answered, and the business strategies have been thought about. It will make sure that you have thought about and considered such things as:
- What are you selling?
- How are you selling it?
- Who are you selling it too?
Some business owners will say they don’t need a business plan as the “Have it all in my head”, This can lead to misunderstandings due to a lack of clarity.
When you try to keep things like a business plan in your head it can cause a number of issues such as:
- You can forget things
- Things you do remember might not be exactly as you had initially worked them out.
- Ideas that you had at one point might have been revised and tweaked and now you are unsure which one is the one you want to use.
- You are unable to revisit the ideas that you initially thought of, mulled over and then dismissed, but now might work.
A well-prepared business plan will allow you to document what you know and have the permanent impact of writing it down.
Writing A Business Plan Is Complicated?
In the world of big business, a business plan is not only essential but is a must have. When you look at some business plans you will see that the layout and sections are modelled after the layouts used for these big companies. However, for smaller businesses and especially start-ups it is not really necessary for you to prepare an overly lengthy and complex document. Your business plan need not be a time consuming, uncontrollable and over-the-top difficult process!
Preparing A Preliminary Business Plan
Preparing a Preliminary Business Plan is a straightforward step by step method that will allow you to organise your thoughts and then write down your intentions in a meaningful way. Apart from giving you a roadmap for your business it also provides you with a structured document that you can provide to, a bank or investors should you need to. By going through the steps of sitting down and preparing your Preliminary Business Plan you will have:
- Engaged in a key strategy that will have helped you to get your thoughts organised
- Totally focused on the intentions of your business.
- Applied a straightforward and step by step process as you prepare your business plan.
- Become more clear about your business, its goals and direction.
What Will A Preliminary Business Plan Cover?
Here are just some of the questions that your preliminary business plan should answer:
- It will describe in detail exactly what the purpose of your business is to be.
- It will describe who will be your customers/clients for the products/services you will be selling.
- It will explain how you are planning to deliver your products/services to your customers/clients.
- It will explain the pricing model that you plan to use.
- If you are selling a product it will list your major suppliers
- It will highlight what you think are the potential risk factors for your business.
- What established businesses are your competitors
- At what point do you plan on having employees and how many?