Build a Business Plan – Are You Building Your Business Blindly?

It has been said that there are two types of business entrepreneurs: Those that plan and those that fail. So do you really need a business plan? If you’re in business to succeed, YOU BET! Even having a simple business plan gives your business a road map to achieving your goals. It gives you a daily, weekly, monthly, and yearly synopsis of your business by keeping track of client activities, your expenses, and your income. Putting your plans in writing validates your business, provides insight and clarity, helps with the tracking of you business success by monitoring the activities, processes, and goals you’ve planned for yourself.

There are 5 basic reasons why you’ll want to prepare a business plan whether you are a start up or have been running a business without one:

1. Stay On Track. Having a business plan allows you to break down your goals and realize the validity of them. Your plan will accurately predict the number of prospects you need to interact with weekly, to determine how many prospects will then need to be converted to clients monthly, giving you a visual of the amount of activity that is needed to meet your sales goal. Your plan will also help you understand the value of each client, how much each client (on average) costs you to acquire and how much ROI they bring in. Example: if you are a retailer, how many customers need to walk though the door to reach the sales goal for the day? Do you average every fifth customer buys something, so that five customers walking in equals one sale? Your business plan will help you spell out these specifics and plan accordingly.

2. Bring Clarity to your goals. Define your goals and be very specific. Set your goals for 1 year out, and then go further to 5 and 10 years out. Be flexible and willing to adjust as you go. If you are a small business, your business plan should include your personal and family aspirations as well as those of the business. Because most small businesses are a family affair, you’ll want to align your personal goals and values with that of your business. It’s important that as a business owner, you don’t forget you have a life outside of business. Therefore, by aligning personal goals with your business goals, the less likely you’ll suffer from burn out and it will keep you from missed opportunities of a fulfilled life.

3. Keeping priorities in order. Your business plan should include an activity schedule, much like you may already use in planning your daily schedule. The activity schedule in your business plan, however, will help you streamline your activities; help you to manage your time more efficiently and effectively. It will help hold you accountable to timelines and schedules that are vital to business growth.

4. Know your budget. The main segment of your business plan is the budget. Once you have clarity on your goals and priorities, you will need to know what is available to you, when, and for what activity. The danger of not having a budget is that you run the risk of quickly moving though the funds available to you keep your business operational.

5. Keep track of clients. Use a Contact Management System, in other words a database, to keep track of your clients, manage their wants and needs, and when and what they last purchased from you. This data will help create a well-organized marketing plan, help with forecasting, and give you tremendous market research as you continually work to build a relationship with your clients.

Having a business plan enables you to ask very pertinent questions about yourself, your business and the business environment (your marketplace) that you are currently in. It helps you to identify all the potential risks your business can face – the “What if’s”. By identifying a business strategy ahead of time, the easier it will be to understand your direction, your budgets, schedules, and how to market to your target audience.

How to Write a Perfect Business Plan

The importance of having a business plan cannot be underestimated. Very few businesses survive without a business plan.

These questions might help you get started writing:

1. What is it that your business provides and what needs does it fill in the market?
2. Who are your potential customers and why will they purchase from you instead?
3. How do you plan to reach your potential customers?
4. Do you have the financial resources to put up your business? If not, where do you plan to get it?

As soon as you have a workable idea for a business, immediately begin to put together your business plan. You should do an extensive market research for your product or service. It is very important that you are able to determine a) how soon your product will pay for itself and b) what your prospective clients really need.

The market’s dominant rule for a business to be successful is that the product or service it sells must be driven by market demand.

In developing and formulating a plan, you have to anticipate and project the different ways your company will make money. An objective examination and assessment of your product or service marketability is an absolute requirement. The planning stage is the best time to determine flaws and shortcomings of your business scheme rather than during the operational stage, by then it is already too late. Correcting the flaws of your business while at the planning stage saves you money in the end.

Defining Your Business Plan
Essentially this contain a description of your business, an executive summary, the primary target market, the opportunity, the management team, financial projections, and so on.

It should be easy to read, clear, concise and to the point. It should also contain the specific milestones for progress so that the success of the company is measurable against well-defined objectives. Prospective investors use the business plan as a tool to gauge management’s ability to actually implement the plan.

Future direction of your business. If you clearly identify where your business will be five years from now, you can effectively formulate a plan that to support your business goal. Your expertise, needs, knowledge, leadership abilities, resources, level of risk, and the nature of your business are necessary and important factors you must consider when identifying your personal business goals. Clearly state your business goal in your plan.

The goal. Will the business plan be used to secure funding or as a guide to operating the business or both? If you are trying to secure funding, concentrate on the financial requirements of the business: state the amount of money required, how it will be spent; be sure to include a repayment schedule as well. If the plan is going to be an internal, functional guide, include the how-to’s of accomplishing specific goals and milestones with emphasis on the business process. The goals of a functional plan are to measure operational progress, analysis of planning projections, predict capital requirements, evaluate addition or elimination of products or services, and assess operational procedures.

Home-based businesses are gaining acceptance as a viable business opportunity and not as a simple hobby anymore. This means even a home-based business needs a plan to guide its growth and future development. Depending on your business, you may put greater emphasis on particular areas of your plan like meetings with clients (service provider), logistics plans and techniques (goods provider).

Writing the Plan
There is no standard formula for the structure of a plan; however, it is generally divided into four sections: Description of the Business; Marketing; Finance; and Management.

A business plan also includes an executive summary, financial projections and other supporting documents but these are considered as attachments.

Including as much information as you can by describing each aspect of your business in detail makes it easier for you to run the business, and for prospective partners and investors to understand the viability of venture.

4 Killer Business Planning Problems – And How to Neutralise Them

Business planning is one of the most critical steps to online or offline business success. It is so much easier to work from a blueprint, when running a business, than it is to work without direction. When you work without any guidance or sense of direction, you get blown with the wind. You get lost in a sea of problems.

When you have a good business plan you can follow it to achieve your life’s dreams. You can modify it as you work from it so that your plan remains relevant at all times. A business plan is the route map to your wildest financial aspirations. All the more reason why you should pay attention to its preparation.

A business plan is a strategic document that manifests the principle of thinking before acting. As a strategic document it details the long term plan to be followed, covering a period of 3-5 years. A business plan is also a tactical document in that it is best constructed at a detailed level that makes the forecasts reasonably accurate over the first year.

Many obstacles stand in the way of constructing a business plan, and this article discusses four of them… being unsure of how to implement a plan, failure to recognise the need for regular updates, ignorance of product planning, and ignorance of marketing planning. The article also proposes solutions to these and other business planning problems.

IMPLEMENTATION

What is implementation? Why must we implement a business plan? How do we implement it? Implementation is the process of acting on a plan. We follow it and apply its findings, while watching the business environment for any significant changes. When there are changes we take them into account by modifying the plan. If the changes are minor we make only tactical changes. If they are major we make strategic changes.

It is one thing to plan, but it is a completely different matter implementing the plan to achieve the desired results. To succeed we must be disciplined while remaining flexible. We must also be objective in our assessments so that we can accurately monitor progress, and we must be ruthless in correcting deviant behaviour. Sometimes this means sacking incompetent personnel and hiring better ones. We shall deal with other implementation issues later.

UPDATES

Why must we update a business plan? A plan must always be up-to-date if it is to remain relevant. You don’t want to follow an outdated plan or it will lead your business astray. An updated plan is one that responds to environmental changes by listening for such changes and using them to adjust its methods.

The necessity to keep a plan relevant means that we must conduct business planning every year. The plan must cover a 3-5 year period in order to incorporate strategic elements. But what are the details behind updating a business plan? We shall discuss this later.

PRODUCT PLAN

A business sells products to make money. As such it must engage in product development or acquisition. What is a product plan? Why do we need a product plan? How do we develop a product plan? How do we implement a product plan? We shall deal with these questions soon.

MARKETING PLAN

Marketing is about bringing customers to your business. Without customers your business can’t survive. You can’t get customers if they don’t like your products or services. Therefore product planning must be driven by marketing considerations.

First you determine what your potential customers want and then you give it to them in the form of products or services. But what is a marketing plan? Why do we need a marketing plan? And how do we develop a marketing plan? These questions will be addressed soon.

Now let us turn to the answers to this and other questions mentioned above… Unfortunately, we do not have enough space in this article to address the aforementioned questions. So we have prepared a special page with all the answers you need. Before directing you to that page let us first summarise what we have done here.

FINAL REMARKS

This article has discussed a number of key problems that you will face when you try to construct a business plan. The problems include…

1. Your lack of skill in implementing a business plan.

2. Your failure to recognise the need for regular updates.

3. Your ignorance of product planning.

4. You ignorance of marketing planning.

The article also points at the solutions you must undertake to resolve these problems. The link to these solutions is provided below.