What you need to know when writing a business plan

A business plan is designed with the intention of carrying out an evaluation of the feasibility of a new business idea. The core purpose of the plan is to help a potential business person analyze the situation at hand in a precise and objective manner. There are a number of questions that a business plan must pose in order to get an accurate picture of the situation at hand. Below are just some of the core questions:

• Is there available a market for the product that your business has on offer? What are some of the particulars that make your product a unique entity?
• Is there a management team at hand to promote the vision of your business? Is the personnel skilled enough to make the business stay afloat?
• What is the financial standing of the business? Is the business poised to make a profit?

The answers to these questions should serve as a guideline to help you assess the likelihood that your business will prosper. The business plan serves as a guide to help you identify great opportunities that your product has at hand. This is a key consideration because it will help you avoid the characteristic pitfalls that are associated with a business that is just starting out. In addition to this, the business plan will also enable you develop strategic plans to help you in marketing your product effectively. This is alongside techniques that you will need when executing administrative duties. The plan also comes in handy when you need to create a budget plan to manage your financial expectations.

A business plan is actually a tool that you will use when communicating the vision of your business to other parties- a selling tool you could say. As such, the importance of a business tool cannot be overemphasized. You will realize just how crucial this tool is when it comes to putting across a financial proposal to different financial institutions. What are some of the specific pointers that such a plan comes in handy when selling your business idea?

• The plan should help you establish the exact amount of money that you need for your business. It will also indicate the money that you have available. If this is not sufficient, your plan needs to indicate the different options that you have as far as financing is concerned.
• Your , business plan must clearly indicate the probability of success. Simply put, what likelihood is there that your product will not flop? In the same breath, the plan should also show the investor return on the investment at hand.
• In financing aspects, the business plan ought to predict cash flow patterns for the business if you are to make any profits. This is in addition to showcasing the liquidity of the business. Any worthy venture must also forecast it ability to set off debts that are accrued in operational techniques- failure to do this means that the business may not stay afloat.

What does a business plan constitute of?

When writing a business plan, you will need to put in a lot of time to find out what your business requires. This will mean putting in a lot of time and effort to develop a proper plan. Depending on the business, more than 100 hours are necessary as a lot of research in the field of choice is required. Ideally, a standard business plan will have three distinct parts as discussed below.

Part 1 of the business plan

The first part of your business plan entails the management techniques that you intend to use to run the business. It is very important that you take note of this as it leads you to develop a proper foundation for your business. This section also deals with the marketing strategies to keep the business going. Due to the critical importance of this section, this part ought to be very well researched. It should also be precise so that points are well articulated. It is recommended that you subdivide the plan with the use of headlines. Bullets also come in handy as they help to improve the readability of the business plan. With all factors put into consideration, the typical length of this section ranges from 10 to 20 pages.

Part 2 of the business plan

The second part of your business plan revolves around the financial implications of managing the business. Consequently, this section will include many numbers- but it is not just the crunching of numbers that we are looking at. Since this section involves your finances, it is imperative that you base your projections on concrete research findings. So accurate do these figures need to be that you may be required to provide a justification for them when presenting your plan to financial institutions where you may want to seek aid. Avoid using estimations in this section as it could prove to be a very costly mistake.

Part 3 of the business plan

This is the third and the last section of the business plan. In this section, you will find additional information as pertains to the business you are going to set up. The additional information is meant to complement the content of the first two sections, and as such, must be very accurate. Usually, the contents in this section of the business plan vary from one type of business entity to another. It is important to note that depending on the complexity of the business, it is sometimes critical to add an executive summary at the beginning of the plan. This is normally a relatively short section and is composed of approximately 5 pages.

As you can see, the process of developing a business plan is quite involving, but the efforts are well worth it. For this reason, you will find that some business owners opt to delegate the task of coming up with such a plan to their juniors. While this may save you on time, it is likely that it will not be as concrete as you would want it to be. To avoid this, you should make sure that you are involved right from the word go.

-- Tony B.

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