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How to Write a Business Plan
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What is a business plan?A business plan is a detailed document that outlines the business goals and how the
business plans to achieve those goals over the next three or more years. It helps
define expected benefits and challenges and provides a roadmap to help you avoid
obstacles along the way.
A business plan is a tool for understanding the makeup of your business. When
writing your business plan, you need to consider everything at once: your value
proposition, your marketing assumptions, your operating plan, your financial plan,
and your workforce plan. However, a business plan is more than just a snapshot of
where your business was in the past, or even how your business is doing today. A
well-written business plan will help you map out your future by setting goals in all
key areas: income, expenses, vacancies, and fundraising goals. Once set, goals
become performance goals. The business plan can help your business attract talent
and funding because when potential customers ask you about your business, you
already have a clear overview to offer them. How they react allows you to quickly
understand how others perceive your business and provide guidance when needed.
What to do before writing your business plan? It may seem superfluous, but you
actually need to plan your business plan. Business plans can be complicated and
you are held accountable for the goals you set for yourself. For example, if you
,plan to open five branches of your company within the first two years, your
investors may be shocked if you can only open two. Therefore, before writing your
business plan, it is essential that you take the time to determine which goals are
essential for your business. If you're struggling to find a list of goals on your own,
this talk offers a few questions to ask yourself for inspiration. • How determined
am I to make this business a success?
• Am I willing to invest my money and work long hours without pay, sacrificing
my time and personal lifestyle, perhaps for years?
• What happens to me if this business does not work?
• If successful, how many employees will this company eventually have?
• What will be the annual turnover of the company in one year? And in five years?
• What will the company's market share be in that time frame?
• Will the company have a niche or will it sell a variety of goods and services?
• What is my geographic expansion plan? Should it be local or national? Would it
be global?
• Am I going to be the practice manager or delegate most of the work to someone
else? If I delegate, what types of work will I be sharing?
, • Is it sales, engineering or something else? How comfortable do I feel following
instructions from others? • Can I work with partners or investors who want to own
the business?
• Will the business remain independent and private, or will it eventually be
acquired or made public?
It is also important to consider your financial goals. Your business may not require
a massive financial commitment to start with, but it probably does if you're
planning for rapid growth. Unless you're making your product or service from
scratch, you have to pay your suppliers before your customers can pay you, and as
Plan Your Business Plan points out, "This cash flow conundrum is why so many of
them are fast. financing or sale of shares to finance their growth. They literally
grow up faster than they can afford.
How much funding do you need to start your business? What are you ready to
accept? If you desperately need that initial cash flow, you might be tempted to
accept any offer, but it might require you to give up too much control or ask
investors for a number that both parties don't like.
These eight questions can help you determine some financial aspects of your
planning stages:
• What initial investment will the business need?
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