What makes a Successful Small Business Plan?

Let's consider two scenarios:

Scenario 1

You write a business plan, send it to potential investors (or to your bank) and voila! You've raised the funds you asked for. You're jumping up and down in joy, and you're ecstatic that you bought that $50 template off the web which you tweaked, cut and pasted into. What a relief, and a fantastic investment, except one thing...

Your business fails in the first year, and you've got to sort out the financial (and possibly even legal) mess. What a waste of time and energy, not to mention, a lot of money and resources.

Scenario 2

You write a well-conceived business plan, based on solid research of your market and competitors, and have made considerable effort understanding issues such as product pricing, buyer demands and behaviors,  required skills and experience to get the business off the ground and managed effectively.

What's more, your potential investors are highly impressed with the level of detail you've placed in your plan, demonstrating how this business will translate into a solid return on their investment. in turn, they endorse your business concept and provide the funding you require to startup.

Which of these two scenarios makes more sense for long-term success? It's a no-brainer! Problem is though, many people who embark on writing a plan gravitate to the first scenario. And that's because when you haven't actually set out a plan, that is exactly what you'll do - focus on immediate needs while neglecting long-term success.

Coming back to Scenario 2...

Even if you did everything as in Scenario 2 but didn't succeed in raising funds, you still have a solid plan which clearly maps out your business concept. You can still work on improving your presentation to potential investors and lenders with confidence in your plan.

Keys to a Solid and Profitable Business

Smart small business plan writing begins with a solid understanding and review of your:

• Business concept
• Business values and ethics
• Market
• Industry's current and future trends
• Unique competitive strategy and focus
• Management requirements
• Labor/Human resources requirements
• Financial controls and measures
• Willingness/adaptability towards change

I cover each of these in detail in the elements of a business plan section of this site.

An effective small business plan thoroughly provides for your short-term business needs, such as funding or financing, building on solid and experienced management, and hiring, motivating and retaining employees. More importantly though, it paves the road to your long-term business success by covering critical issues such as market demands and industry trends, financial controls and change. It's a full and balanced snapshot of your business.

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