Prepare A Business Plan That Guarantees Profits Part One
June 3, 2008 by Glenn
To attract investors, obtain financing and hold onto the confidence of your creditors, particularly in times of cash flow shortages - in this instance, money you have on hand compared with the expenses that must be met…
Success in business comes because of planning. You need a detailed, written plan that shows you what the ultimate goal is, the reason for the goal, and each milestone that must be passed to reach your goal.
A business plan is a written definition of, and an operational plan for achieving your goal. You need a complete business tool to define your basic product, income objectives and specific operating procedures.
Aside from an overall directional policy for the production, sales efforts and profit goals of your product - your basic “travel guide” to business success - the most important purpose your business plan will serve, will be the basis or foundation of any financial proposals you submit.
Many entrepreneurs are under the mistaken impression that a business plan is the same as a financial proposal, or that a financial proposal constitutes a business plan. This is just a misunderstanding of the uses of these two separate and different business success aids.
The business plan is a long-range “map” to guide your business to the goal you’ve set for it. This plan detail’s the what, why, where, how, and when, of your business - the success planning of your company.
Your financial proposal is a request for money based upon your business plan - your business history and objectives.
Understand the differences. They are closely related, but they are not interchangeable.
Putting together and writing a “winning” business plan takes study, research, and time, so don’t try to do it all in just one or two days.
The easiest way is to start with a loose leaf notebook, plenty of paper, pencils, pencil sharpener, and several erasers.
Once you get you mind “in gear” and begin thinking about your business plan, “10,000 thoughts and ideas per minute” will begin racing through your mind…
So, it’s a good idea when you aren’t actually working on your business plan, to carry a pocket notebook and jot down those business ideas as they come to you - ideas for sales promotion, recruiting distributors, and any other thoughts on how to operate and/or build your business.
Later, when you’re actually working on your businesses plan, you can take out this “idea notebook” - evaluate your ideas, rework them, refine them, and integrate them into the overall “big picture” of your business plan.
The best business plans for even the smallest businesses run 25 to 30 pages or more, so you’ll need to “title” each page and arrange the different aspects of your business plan into “chapters.” The format should pretty much run as follows:
- Title Page
- Statement of Purpose
- Table of Contents
- Business Description
- Market Analysis
- Business Location
- Management
- Current Financial Records
- Explanation of Plans For Growth
- Explanation of Financing for Growth Documentation
- Summary of Business & Outlook for The Future
- Listing of Business & Personal References
This is a logical organization of the information every business plan should cover. I’ll explain each of these chapter titles in greater detail, but first, let me elaborate upon the reasons for proper organization of your business plan.
Having a set of “questions to answer” about your business forces you to take an objective and critical look at your ideas. Putting it all down on paper allows you to change, erase, and refine everything to function in the manner of a smoothly oiled machine.
You’ll be able to spot weaknesses and strengthen them before they develop into major problems. Overall, you’ll be developing an operating manual for your business - a valuable tool which will keep your business on track, and guide you in the profitable management of your business.
Because it’s your idea, and your business, it’s very important that YOU do the planning.
This is YOUR business plan, so YOU develop it, and put it all down on paper just the way YOU want it to read. Seek out the advice of other people; talk with, listen to, and observe, other people running similar businesses; enlist the advice of your accountant and attorney - but at the bottom line, don’t ever forget that it has to be YOUR BUSINESS PLAN!
Remember too, that statistics show the greatest causes of business failure to be poor management and lack of planning - without a plan by which to operate, no one can manage; and without a direction in which to aim its efforts, no business can attain any real success.
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