“He who fails to plan, plans to fail.” 
A roadmap, or now GPS, is required to reach a new destination in your car. Say you live in New York and you decided that you wanted to drive to California. You would not jump into your car and just start driving because you could potentially end up in Texas. A business plan is like roadmap. You need to plot your journey to ensure safe passage to your desired destination. While a spirit of fear and anxiety may strike the moment that you think about putting together a business plan, this is a very important step for aspiring business owners.
Education:
Create your yellow brick road!
In today’s lesson, we will discuss the importance of a business plan for entrepeneurs. A business plan is a formal statement of a set of business goals, the reasons they are believed attainable, and the plan for reaching those goals. It may also contain background information about the organization or team attempting to reach those goals. Moreover, it articulates your vision by communicating how you will get from point A(where you are) to point B (where you want to be). It forces you to formulate a strategy and to think critically through the first three to five years of business. In addition, a business plan will help you figure out the following factors. A business plan is part of your due diligence; it tests the vitality of your idea.
An effective business plan will contain the following information.
- Identify the WHY
- Market analysis
- Financial projection
- Trend analysis
- Industry information
- Cash flow needs
- Break-even point
- Capital expenditures (budgeting)
- Capital or capitalization needs
- Start up costs
- Financing needs and the cost of capital
- Personnel needs
- Location
- SWOT Analysis (See Lesson #58)
- Marketing plan
- Competitive Analysis
For many, the feelings of anxiety will creep in right about now, but there are great resources available to assist you. There are companies who specialize in providing this service. There are numerous, industry-specific templates available on the web. There are mentors who have come before you and who can provide valuable assistance (maybe an old plan that you can pull from).
Finally, your business plan should be clear and simple. Excessive language, poor research, unrealistic projections, or an uninspired plan will not help you succeed. Put yourself in the shoes of the reader. If you were coming to YOU with this business plan, would YOU invest in YOU? It does not matter if you have a great idea, if you cannot communicate effectively.
Here’s a look at three apps that can help get your business plan rolling (source: Entrepreneur.com):
- Enloop
- StratPad
- Business Plan Premier
Do not skip this step.
Do not be intimidated.
Do not underestimate the value of a well written business plan to your success.
Resources:
Entrepreneur.com – Website and magazine for today’s entrepreneur.
Important terms from this lesson:
|
Term |
Definition |
| Business Plan | A business plan is a formal statement of a set of business goals, the reasons they are believed attainable, and the plan for reaching those goals. It may also contain background information about the organization or team attempting to reach those goals. |
Education and Action 