February 22, 2018
It doesn’t need to be 20 pages or more. Depending on the type of business or product, a business plan can be shorter than expected as long as it covers all of the essential components that an entrepreneur must think through to determine whether or not a potential business is worth the investment. All entrepreneurs, start-ups and business owners could benefit from thinking about the areas often covered in a business plan.
Learn why more businesses should be writing their business plan today.
What Is a Business Plan?
Essentially a business plan serves to outline what will be done and how to achieve specified goals. It is meant to be strategic and provide a framework to achieve growth over the next three to five years. There are a number of components to consider prior to writing a business plan including, goals and objectives, financing needs and marketing.
A business plan serves as a road map and should not be left on a shelf to gather dust but taken out periodically to ensure that businesses are staying on track and achieving stated objectives. An entrepreneur will need to complete important sections, such as the executive summary, business description, market strategies, competitive analysis, design and development plan, operations and management plan and financial considerations.
Which Businesses Need a Business Plan?
Business plans can be very useful for those starting a business and looking for capital. Firms may want to write a business plan to manage their company, handle suppliers, prospect to grow their business or attract employees. Depending on the objectives of an organization or business, a business plan can be tailored to meet a variety of needs while sharing some key components, including the business concept, the marketplace section and the financial section. Taking time to analyze a target group of customers can help with positioning and assessing resources, and income and cash flow can be used to set important benchmarks.
Any person looking to invest resources into a venture and wanting to realize a profit would benefit from writing a business plan. Startups and established firms use business plans and few businesses would not find the process of creating a business plan useful toward meeting short and long-term goals.
Why Entrepreneurs Could Use a Business Plan
Some of the most promising entrepreneurs in the Young Entrepreneur Council (YEC) believe that writing a business plan is helpful for additional clarity, understanding a market, getting organized, addressing how to achieve goals, creating a feasible financial model, considering challenges, getting key members aligned and providing a way to hold the organization accountable.
This is outside of the need to get outside investment. The mental gymnastics are useful in establishing specific benchmarks, to stay on track or to adjust to future challenges or changes in the market. A business plan is a way to keep it honest and stay in touch with the original objectives regarding the business or enterprise.
A good business plan can help entrepreneurs create and run a successful business. A plan can help determine the chances that an idea, product or service will generate a profit, how much capital will be needed and estimate start-up costs, solve potential problems before they become an issue, and create a realistic revenue estimate. This is in addition to the other benefits of thinking through writing and revisiting a business plan. A formal business plan is needed for those looking to raise money and get the attention of investors.
Know when to get started and how much effort it will take to turn a profit. Small business owners and entrepreneurs need to cover all of the important aspects involved in a formal business plan in order to assess the potential of a venture.
Ryan Tollefsen is the founder and team leader of Unity Home Group.