Why Write A Business Plan?

How Do I Write A Business Plan is a question very much on a business executives mind usually around mid-year or during the last quarter of the financial year? As it is part of the management process, most businesses would have scheduled the business plan sub-process to start at a suitable time of the year. There are others, usually small independent entrepreneurs who may probably put it together as the need arises. This could be due to the need to apply for financial assistance or to impress a third party on some important business matter or venture. However it is done, a business plan is important as it serves as a performance reference, sets the business direction and rallies the team to an agreed business objective.

The 7 Elements Of A Business Plan

Executive summary which is written after the plan is finalized. It briefly provides an overview of the business plan in terms of the approach employed and key considerations in terms of business offerings, key staff and expectations in terms of financial results.

Introduction consists of a brief description of the business, the policies, mission, vision, purpose and objectives of the business for the specific business period. In some cases the introduction may even include a broad of the anticipated business environment. A short review of the previous business period would be appropriate.

Marketing analysis. Here the specific industry is assessed in terms of how the business would meet the challenges. A strengths, weaknesses, opportunities and threats (SWOT) analysis would be helpful.

Marketing plan. What would be the marketing strategy best suited to benefit from the opportunities identified and overcome the challenges foreseen.

Operations plan. The how and what of the business in terms of structure, location, rules and regulations, key operational processes and such other details.

Management plan. How the business is to be managed including key personnel, their qualifications and experiences as well as relevant business credentials.

Financial plan. The dollars and cents that will realize the business including costing and financial projections. Charts and graphs would be beneficial.

General Recommendations

In putting together a business plan the process must include adequate consultation, gathering of relevant inputs, discussion on strategies, review and validation of information. If the process is well oiled, the time taken to write the business plan, get it approved and put into operation can be minimized. Further, if the plan is to include different periods, these can be separately categorized into short, medium and long term plans. As the business plan is an important reference it must be well written. Spelling, grammar and flow would be key considerations in writing the document. To be well written, it has to be checked and re-checked. In this regard, many find software for better writing as well as dedicated business software to be helpful.

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Writing a business plan not only helps you to establish whether your idea is a viable one but it also helps you to lay out a direction for the future of your company. Without it, your business could simply meander along with no real direction and with no means of measuring its success.

It may not be an easy process but going through with writing a plan could force you to think carefully about your business overall and whether the model will work. Once complete, you’ll have a much better idea of whether you can make your venture work and whether you still really want to go ahead with it. Before you invest your own time and money into any idea, wouldn’t you rather have done a plan first to make sure that you know it can work?

There is now software available which can help you with writing a plan so it does not need to be such a mind-boggling task. There are online sites and a whole host of self-help resources out there which will help you to draw up a plan and carry out an analysis of your proposed ideas.

To carry out just a quick assessment or executive summary of a business idea will only give you a very brief overview and will not go into enough depth about whether the business could be viable should any extenuating factors get in the way – and let’s face it, there will be many!

In your business plan, you can expand it to include critical factors such as contingencies should you need them. You can work other factors into it that needn’t be too complicated but will give you a good idea of where you might be in, say, five years’ time. It will help to focus your mind on your goal and show others how you plan to keep yourself afloat.

And once you have your plan, it is never lost. All good projects or ideas start out with a plan. The plan then changes as it goes along if need be and you can keep reverting back to the original plan to track and measure your successes or failures.

Of course, having a plan does not ensure success and some would argue that a full business plan for a small venture is not necessary; that your time would be better spent on getting your business up and running rather than worrying yourself with laborious documents. However, you can make your plan as minimal or as in depth as it needs to be, according to the size of your proposed venture.

But bear in mind that, as with any plan, it could be seen as a restrictor and actually remove the entrepreneurial spirit in which the business idea was first created. You should always remember than any plan can be broken, changed or amended at any time and that it’s important for small business owners not to lose the importance of free will.

So, ‘to plan or not to plan?’ – that is the question.

What is it?
Every business, whether big or small, requires strategic business planning to be successful. All businesses face issues and problems on a daily basis that need to be resolved in order to make the business reach its targets or goals. Most of the top-management resolves such problems by developing optimized tactics, which work fairly well. However, to make a business successful, something more than tactics is required. You need proper strategic business planning to maximize growth and give your business that extra edge. Strategic business planning is developing and formulating a business plan keeping in mind all strategic factors, such as competitors, demography and customers, that can influence the business.

What are the factors involved?
With each business having a unique set of factors that distinguishes it from others, strategic business planning is never easy. However, one thing that is common for all businesses – their aim to be financially effective in order to survive in the market. Thus, while implementing strategic business planning, the primary factors that need to be looked into are the optimal use of resources at hand and maximization of returns on investment (ROI). Apart from these, the budget is another key aspect that has to be looked into during strategic business planning. A business plan devised for a multi-million dollar company would be totally different from one formulated for a small business with a limited budget. The key to proper strategic business planning lies in discussion, development of new understanding of business aspects, gaining new insights and the generation of new ideas.

Who can help in formulating?
While one can look into their in-house management team to formulate a strategic business plan, it is always better to look for specialized services that can understand your business with a new prospective and have high expertise in your field. This would provide your management team a third-party view, ideas and assistance during strategic business planning, enabling it to create a strategic plan that would be both effective and efficient. Obtaining the assistance of a facilitator will also help your business gain an edge over that of your competitors.