Business Plan Preparation

Your business plan is one of the most important documents that you have. When you begin researching your business and planning what to do, writing it all out in the form of a business plan helps you to organize your thinking and make the path to your goals concrete. As you begin to move towards those goals, a business plan can remind you of things that you researched and keep you on the right track. Your business plan is also important to anyone with whom you want to create a business relationship; for example, a business plan is a necessity when you are applying for a loan.

A business plan demonstrates to the supplier of the loan that you are a responsible party, that you have done all the necessary research and that you have the resources you need to make your business successful. A business plan also allows the agent of a potential lender to defend the value of providing your business loan to their own bosses and to other potential lenders in the event that they decide to sell the loan. As most businesses require some form of outside funding to get started, a business plan is an absolute requirement for most, and for start-ups it represents the core of your new business.

The first stage in preparation of a business plan is research. Market research and analyses will enable you to identify potential business opportunities specific to you. During the initial research phase, you can determine what kind of resources you will need, what sort of equipment or technology your business will depend on, and what characteristics define the most successful businesses existing in the field. You can use this information to put together a strong strategic plan; start out with a general framework, then develop the details with the assistance of professional advisors in the industry or software tools that can help you lay out the costs and profit-making potential. Determine whether the business plan that you are writing is meant primarily for in-house use or for being shown to investors / lenders. It may be worthwhile to have multiple drafts of the business plan for varying purposes. Start thinking about who you will need to show your plan to, and the specific needs that the recipients of the business plan will have, so that you can tailor the business plan to their requirements.

The actual writing of the business plan can be done personally or with the assistance of specialized software or business advisors. Many people choose to entrust the writing of a business plan to a specialist who has written successful plans before and who has a track record of writing plans which secure solid loans. If you choose to write the business plan on your own you must systematically determine what issues and topics are most important, plan out the lengths of the various sections and whether they will require any kind of appendices, attachments or graphics to demonstrate the information, and write out work programs and how the business will respond to various conditions that are likely to occur. A business plan should logically explain the responsibilities of everyone involved in the business. It should also contain the necessary financial projections: the amount of money which will be needed to get the company started, the sources from which funding may be acquired, and a timeline towards profitability with goal points and specific measures on how they will be reached.

Once you finish putting together the first draft of your business plan you should take a step back and try to have a sense of whether there is anything missing. Get an overview of the plan and try to write the most important elements of your business plan in a detached summary. Take your business plan to advisors and get their opinions on how to make improvements for readability or overall quality. An experienced advisor may be able to recognize areas in which your business plan is deficient and point you in the direction of research that could make the difference between success and failure. After making sure that your plan has everything that it basically needs, you should continue drafting it for better flow and readability. Fine tune the business plan and spell check it. Make sure that the graphics and addendums contain all the information that is needed and conveys it in a way that is easily understandable to the target audience. Consider all of the aspects of the business plan’s presentation – see that the business plan is well bound and organized, that it clearly identifies the funding needs of the business and what that money will be used for, that it has answers to all of the key questions that potential lenders and other business partners will have, and that it will provoke the response that you are looking for.

After you have presented your business plan to potential investors, convinced people that you have what it takes to run the business (and that you have done all of the necessary research), and secured the monetary resources that you need, you enter the next phase – running your business. The important thing to remember now is to stick to the plan! Now is the time to take advantage of the goal points which you laid out while you were focused on research. If you choose to deviate from the methods which you detailed in the business plan for achieving your goals, how and why are you doing so? Are any changes that you make the result of new and unexpected conditions in the market? If your business plan’s primary focus was on convincing investors to provide funding for your company, you may need to write a new business plan better adapted to the personal use of yourself and anyone else involved in charting the course of your business. Don’t be afraid to ask for advice at this stage – new companies and many industries don’t last very long, and you should always be open to advice from people who are experienced and have worked with established companies in your business sector.

If the business plan which you prepared does not deal with the issues that arise after you get started, feel free to make adaptations. Just make sure that any changes and additions to the plan are well considered, that you get the best advice possible before making a correction, and that you do not change it just for the sake of change or without thinking about the potential consequences. Any business plan is likely to require alterations and additions at some point; be sure that you put the same kind of care into market research and analyses now as you did in the early phases of planning before the business had started. Remember that those that fail to plan, plan to fail.

Many businesses with simple plans in markets that do not change very quickly review their business plan annually. Reviews on an annual basis let you make sure that you are achieving your short and long term financial goals and show you whether your methods are connecting with the market effectively. If there is a significant shift in your market or a change in the fortunes of your business over a short period it may be a good time to review your business plan, again with the assistance of local advisors and organizations which help small businesses (such as the Small Business Administration) to see what kind of changes would be best for adapting to the new conditions.

Whenever you encounter a change in your business plan, such as when you need a new loan for some kind of expansion or further development of the business, consider having it reviewed by professionals. Make sure that it continues to reflect the updated realities of the situation, and be willing to rewrite it for the needs of whoever you are going to be showing it to. Often the process of rewriting will help you to better understand your own goals and the steps which you need to take in order to achieve them. By always being ready to update your business plan and keep it in sync with the needs of your business and your business partners, you can demonstrate to everyone that you are on top of the situation and that you understand everything that your company needs in order to be successful. This will inspire confidence in yourself as well as the people who you need to work with. By putting together the strongest possible business plan with the most help and advice possible, you can increase the odds that you will be able to form strong partnerships and that your business will be able to maintain its success over the long run.