Creating a Business Plan - Getting Started

Let's face it. Few people actually enjoy writing. Even fewer consider writing business reports a pleasant experience. Most likely you're creating a business plan because you have to...

• A potential investor or venture capitalist needs you to write a business plan to determine whether or not to fund your business
• The bank needs you to write a plan to review whether or not to approve a loan
• You need a business plan  to show your board how you will implement or grow your division

The bottom line is you need one, so you're ready to get your hands dirty and get one together, right? Well before you do, let's review a few important issues.

First and foremost, creating a business plan is about achieving the end results you expect. Yes, it is definitely about meeting the needs and demands of potential investors and lenders, but if you're going to persuade these people to fund your business through your business plan, you'd better bet they will measure your results against what you put into your business plan. In a nutshell, creating a business plan is about:

• Studying your target market to see if a demand for your business idea exists
• Investigating whether your business idea is feasible
• Proving that your business idea is profitable and has the propensity to grow through solid market research and intelligence
• Showing how your product or service is clearly advantageous to buyers when compared with your competitors'
• Demonstrating how you will take your business to profitability and make it grow

So, you're really doing this for yourself, to be sure that it's worth going into business in the first place, and that you're indeed committed to sticking it out for the long-term. If you can't objectively convince yourself that this is the right decision, supported by solid research of your market, then there's no point even thinking about presenting your business idea to anyone else, and you can forget about creating a business plan altogether.

Once you're absolutely convinced that your business idea will succeed, and you can prove it to yourself that it will, then you're ready to start preparing a business plan to present to potential shareholders, investors, venture capitalists and lenders. Of course, there's no magic formula that guarantees your success, but there's a lot you can do to study and test your market to give you an understanding of whether the potential is strong.

Your business plan is the master blueprint to your business success.

There's no point mincing words here...

Most would-be entrepreneurs will never see their business idea go past the business plan stage. Most will throw something together and treat the process as a burden, as something that must be done.

The challenge most people face when starting a business is that they need funding to get the business off the ground, and no one is simply going to fund your business because you threw some fancy words and graphs together into a report.

The reality you face as an entrepreneur is that you'll be creating a business plan to show your funding sources how you'll take your business idea from scratch and turn it into a thriving business. And then you'll actually implement the strategies laid out in your business plan as closely as you can, knowing that the targets you set in your plan are what you will be measured against.

So whatever you do, don't look at creating a business plan as a burden; look at it as an exciting opportunity to visualize how your business will take shape and grow over time. Your plan will guide you through both the short and long-term issues of building a successful business.

Planning gives you clarity.

Investing a good deal of time and effort in planning your business will help you have a clear understanding and picture of your business from various angles:

• Marketing your business: Do you have a clear idea of who your target market is? Do you understand their needs and problems? Do you know what choices buyers have now, i.e. your competitors? Do you know if there is enough demand to justify introducing your product or service in the market?
• Operating your business: Do you know what kind of skills you will need to employ to run your business? Do you know how many employees you'll need at start and when you start to grow? Do you know what systems, procedures, equipment and work environment you'll need to sustain your business growth?
• Projecting your business finances: Do you know how much money you'll need to get your business off the ground? Do you know what will be your break-even point? Do you know how much cash flow you'll need and be able to create over time? Do you know how much income you can realistically earn and how much you'll need to spend?
• Long-term growth: Do you know what targets you expect your business to achieve after one, three or five years? Do you know what steps you'll take to deal with challenges and changes to running your business?
• Exit strategy: Do you know how you'll exit the business if necessary?

Creating a business plan that is focused, objective, and thorough is an important step towards planning your success in business. Over time, it will guide you through the steps you'll need to take towards achieving your business goals. Your plan will potentially save you money by focusing your business on the tasks required to meet your targets. And it will give you a competitive edge over your competitors who failed to prepare a solid business plan, and keep you on level with your competitors who make business planning a regular part of their culture.

Anyone can come up with a business idea - they are a dime a dozen. It's those few who take it to the next level by creating an executable business plan that have a worthy shot at success.

Back to the How to Write Business Plan Page from this Creating a Business Plan Page