All Businesses Need a Business Plan
Fish Sharee wrote about the importance of planning for success in any business venture.
No matter what size of business you have; importance of a business plan should never be overlooked. Having a goal for your business is one thing and defining path to achieve that goal is another. The business plan is a set of rules and guidelines that make sure that you are on track and in accordance with your long term business goals.
Your operations and results can never attain stability in the absence of a properly researched and analyzed plan. This article is particularly focused on how essential a business plan is for long term objectives of any company.
Calculating, predicting and determining profits:
The main reason of any business is to make profit unless you are running a non- profit organization. It is not only you who will be interested in determining the profit of your business but if at any point you need finances and seek an investor; he’ll be more interested in your profit figures than you. Your plan is essential in calculating profit by taking into account your assets, liabilities, expenses and cost of goods sold. Planning also helps in predicting future profits which is known as forecasting.
Start-up and expansion cost:
If you are starting a new business a plan will help you calculate the amount of capital required to start your company. If you are looking to expand your operation and require finances for it your business plan should be able to tell you about the amount of additional capital needed. Lenders will also be interested in your business plan before investing in your business or before approving any loans.
An ideal plan includes your marketing strategy and how you are looking to advertise your product. Marketing your business is usually considered costly and often requires additional finances. A plan demonstrating the main objectives of your marketing strategy is more likely to find you reliable investors.
Business is run by its managers. Stakeholders are always interested in the management team running the day to day operation of a business. Business plan should include a brief introduction of each of the member of management team, their past accomplishments, educational backgrounds and area of expertise. This part of a business plan will present an inside view of the operation of the business to potential investors and other stakeholders.
Plans are not only useful for new companies. For bigger organizations the plan includes the method of mergers and how are you going to operate both the companies. You business’s success and profitability doesn’t guarantee a sure merger.
A plan is extremely important for your business and it should be made after thorough research of the market and competitors. Many professionals offer their services to help you create a solid business plan. It should always be remembered that your business plan must be flexible enough to welcome any positive changes required during the course of operation. Ideally business plan should be revised and published after the end of each financial year.
What’s in Your Business Plan