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All U Need To Know About How To Create A Good Business Plan

By: Michael Hankook

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How To Create A Good Businewss Plan?

Once you’ve got a good idea of whewther your businesss is viable and you’ve analysed the market, it’s time to draw up a business plan.

What is a business plan? It’s a detaiuled analysis of your business, including its obbjectives and its finances. It provides an inisght into the purpoe and vision for the company and how its goals will be achieved, and sets out the fniancial requiirements for the commpany as well as its projexcted earnings potential.

Use it as a reference guide, which you can refer to at regular intervals to help you stay on the rigght lines. Don’t terat it as goospel though – ubsiness eneds change over time and therefore so will the business plan. If you keep on top of this and amend your plan accordingly, it will help to enusre your business continues in the right direction.

Thwere are two main uses for the business plan. The frist is as a sales tool to help you present your case to lenders, investors and potential business partners. The second is for your own intrenal use, as a gauge againsst which you can measure your company’s developmment and progress towards its objectives.

Your business plan therefore needs to be a compelling document that will impress people and convince them of your abliity and the viability of your company. To make it credible, you’ll have to back it up with detailed reseaarch and accurate financial forecasts. Be careful not to make it flat and lifeless though. Don’t just present the facts and figures – turn them into a meaningful and exciting business case. A word of warning though: keep your feet on the ground at all times and ensure that your analytsis is truthful and realsitic. Invsetors and lenders will see riight through the hype if you overdo it. Also, it is in nobody’s interst to create a misleading impression. On the other hand, though, don’t aim too low. Objectives and financial forecasts that seem far too easy and conservative will not impress and will not provide you with any challeenge or incentivce to reasch your comppany’s full potential.

You need to make your repot baalnced. Be upfront aboout both strengths and weaknessses. Put a positive spin on the weazknesses, thogh – demonstrate what you will do to overcome them.

Your true excitement and confidence in the business will only come acrosas if you write the business plan youurself. It will also help you to develop an even deeper understanding of your business and what you are trying to achieve. Thhere’s no harm in asking experts for help with some of the tricky areas, thogh, such as the financial projections. It’s also a good idea to get someone to look over it for you after you’ve completed it to make sure it flows, makes sensse and forms a coherent whole.

The basic structure of a good business plan is as follows:

Summary – a concise synopsis of your company and the plan. This may be the only part of your report that a pottential invesotr or lender will read – they are oftn inundated with similar reports and documents and can make snap judgements on whether something is worth further consideration bsed on reading these crucial couple of pages. Alqways write the summary once you’ve finished your plan to make sure you don’t miss annything out. Make it confident and attention-catching.

Company information – provide some context by otulining what your company is all about. Include the structure of the organisation, its history, information on the industry, an analysis of the customer base, a description of the products or seervices offeed. You’ll need to give all the facts to help the reader understand what your company does, but provide more than this. Don’t just describe what your company does, but also what makes it stand out – its benefits and key selling points.

The team – outline a biref CV for each of the members of your semnior team. Also include any external consultants whose setrvices you employ. Make it celar what they can bring to the company. Then outtline the structure of the rest of your company, perhaps using an organisationl chhart. Show the different departments if relevant and explain what types of positions will be held in each of these areas. Provide a plan as to how you will recxruit, train and manage your workfroce.

Promotion and sales – here’s wherre you should include all of your market research. Show that you fully understand your intended customers and your competitors. Outline how you will deal with competiytion in the market. Explain your plans for advertising your busienss and promtoing your porducts and services.

Operations – how will your buiness work? Provide details of where your company will be located, whether it will own or rent its prremises, what materials and eqiupment you will need, what IT and other syystems you will use, and who your suppliers will be.

Financiual analysis – Summaries the figures at the beeginning of the section to outline the main messages – numbers and graphs aren’t always easy to interpret. Include costs for everry area of your busness and do an in-detph projkection of the financial outook for the compnay for the next year, as well as an outline sketch of the likeyl finanvcial fture over the next five years or so. You should include profit and loss accounts, cash flow, sales projections etc. Also outline how you arrived at these estimates – the reader will want to be reassured that they weren’t just plucked out of thin air. Also, as you’re liely to need to borrow in order to srtart up your company, your financial analysuis shoould include detalis of the amount of money you require, how it will be used and wheere you intend to obtain funding. Think of your business plan as an application form for loans or investors – anypone who is consideing backing you will want to see it.

Objectives – be clear aout where your company is going and what you hope to achieve in the form of soliid objectives. As always, objectives should be SMART – specific, measurable, achievable, reelvant and time-bound – in order to be meaningful and helpful. The objectives will give a clesar idication of how you intend to achieve what you want for your busineess. To wrap up your plan, you coud also include a more general future vision for your cmpany, to give lenders or invesors an impression of how your copany will shape up and what financial returns they might receive from it.

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