“What? Me, write a business plan?”
This is a very common attitude among business owners. They would rather be out there in the field, doing some real actions. They are too busy running the business, striking deals, or cashing the check.
But, is it really important? Like me, you’ve probably heard of stories about successful businesses whose business plans were written on a napkin. Could it be that the founders of those companies have some sort of “visual plans” held inside their heads? I wonder.
To answer that question, I’ve done an Amazon Search using the keyword “business plan” and the search resulted to 90,000 plus book title entries.
Hmm… There must be something to it that is of value to your business. Let’s discuss the basics of business planning in this article.
The 7 Uses of A Business Plan
Here are the most common reasons why entrepreneurs come up with a business plan, whether during the startup phase or soon after it is already operational.
- It sets business goals and milestones and program your activities in advance.
- It evaluates risks to minimize costly mistakes.
- It assigns tasks to people and departments.
- It defines a new business.
- It reviews the direction of an existing business.
- To determine the financial requirements of a business
- To support a loan application.
There could be other uses or reasons for coming up with a business plan. For some, the need to apply for a business loan is reason enough to craft a plan. 🙂
If you are already convinced about the importance of business planning, the succeeding paragraphs below will show you how to create one.
Important Components of A Business PlanTo help you make your own business plan, here is a list of its major components that you need to include:
The Executive Summary: This is considered to be the most important part of the business plan since it provides a concise overview of the entire contents of the plan. You can put here the following:
- Business Objectives, which include sales and profit objectives.
- Vision and Mission Statement
- Keys to Success
Organization Plan: Choosing people to be in the business is very crucial. You have to place the right people on their proper positions. Cite the hiring process and establish the qualifications needed to get the job. This step will make sure that everyone will work with the same objectives as you do and that the company goals will be met.
Sales And Marketing Plan: Without buying customers, your business will be dead. This part is your battle plan to keep your business alive. Included here are your sales and marketing strategies, which intend to acquire new customers or have the existing ones keep coming back to you. Hopefully will be an on-going process.
Recommended Product: If you love Marketing — and you should — you’ll love this piece of software too: Palo Alto’s Marketing Plan Pro, Powered by Duct Tape Marketing.
Product and Service Lines: What do you have to offer to your customers? Here you have to emphasize how your customers can benefit from your products and services. Sounds simple enough?
Financial Plan: With any business plans, you need to determine your financial sources. This is true whether it is for a new venture or for an expansion program. Point out how much money you need to start and keep the business running.
Business Planning Tools
Spreadsheet — If you are a Windows user, that means the good old Excel, which is probably your most favorite tool among the suite of applications from MS Office.
Business Plan Software — There’s a lot of them in the market and you can find one by going to Amazon and typing “business plan software”. We highly recommend the one created by Palo Alto Software called Business Plan Pro currently in version 12.