To most start-up owners and entrepreneurs, the words ‘business plan’ can leave you feeling anxious – whether you’re a technical or a creative-based business. Not only is the process of writing a business plan time-consuming, it also forces start-ups to think about what they specifically want to accomplish and what that will look like financially. Because life for a new entrepreneur can be hectic (think job, family, chores, not to mention your new venture), a plan can help you to stay organized and think strategically about the future and where you see the business going.
Luckily, there are many tools and resources out there for
start-ups who need pointers in what should be written in a business plan and how to go about getting started. In this new series, our blog will tackle some issues related to business planning (and writing!). In an article compiled by Entrepreneur.com, a comprehensive overview/introduction to business plans outlines the basics of business plans.
What is a business plan and how can it help me?
In general terms, a business plan is a written description of your business’s future – a document describing what you plan to do and how you plan to do it. A business plan is typically around 15-20 pages in length, but that can vary depending on what you’re using the plan for and the nature of your business. Specifically, there are usually seven segments to the plan itself:
– Executive summary
– Business description
– Market strategies
– Competitive analysis
– Design and development plan
– Operations and management plan
– Financial factors
A written plan is helpful not only for seeking investments and funding, but to keep a new business organized, to identify its vision, to attract key employees, deal with suppliers, and how to manage the company better.
Who needs to have a business plan?
Many people may not think they need a written business plan — or that they can just ‘wing it’ when getting started. This is not the case. If you’re starting a business that is more than just a hobby that will consume resources (such as time, money and energy) and that will be hopefully generating a profit, you need a plan.
New entrepreneurs writing a business plan are usually doing so because they are seeking funding – and having a written plan is essential when you’re pitching to bank lenders, venture capitalists and angel investors.
Even if you’re running an established and successful business, it is still beneficial to create a written business plan if you don’t already have one. It can help you to evaluate (or re-evaluate) the market and competition and assess your marketing and financial plans, which can help you to prioritize and think about the bigger picture, and can lead to better internal operations within the company.
Why business plans are a work in progress
Once you have written a business plan, you shouldn’t set it aside to be forgotten – you should be re-working and updating it as necessary. Your plan should be a living document, something that is you can update to fit the changing market, financial forecasts, and any changes within your industry.
While you don’t need to read and revise the plan each and every day, the following are some specific times when it’s important to update a written plan:
– When a new financial period is about to begin
– You need initial or additional financing
– There has been a significant change in the market
– Your company is developing a new product, technology, service or skill
– There has been a change in management
– If your company hits a milestone, such as moving out of a home office or crossing over $1M in sales
For the complete overview of writing a business plan on Entrepreneur.com, visit: http://www.entrepreneur.com/article/38290.
What are your thoughts on writing a business plan? Do you think that it’s essential to the start-up process? If you’re an entrepreneur who has written a plan, feel free to share your tips for those who are just getting started and/or why writing a plan can be so beneficial.
Thanks for reading, and until next time… stay WISE!