Your Guide to Creating a Winning Business

Dear Reader,



Plan Step 2


Why do you need a Business Plan?

A large number of clients want a business plan to present to investors,
backers or in most cases bankers. Now I 'm not saying that is not a
legitimate purpose for a business plan, but there are many other equally
valid reasons.
Many of the businesses I have come across are trying to raise capital as a
last resort. They are in financial difficulty - bluntly they've run out
of money - although they may not realise that yet and are trying to
financetheir way out.
In most cases they are where they are - because either.........
* They don't have or didn't have a plan for their business or
* They don't or didn't understand the financial dynamics of their business
The time to have a business plan is before you get into trouble.
Now you may be thinking that there are successful entrepreneurs who have
made it without a structured business plan. Yes there are, but for every
one that has succeeded there are probably thousands who have not - which
do you want to be?
A business plan forms the skeleton of any new venture. No matter how strong
your muscles or how great your ideas, it is impossible to function as a
human being without a skeleton holding everything together.
Similarly, without a business plan, you are nothing more than a pile of
thoughts with no mobility or direction. You wouldn't drive aimlessly
up and down the streets if you have a specific destination in mind.
Instead, you plan a route to your destination. Whether you choose the
fastest route on the motorway or the scenic back roads, you still have a
plan in mind. So why would you start a business without having a clear plan
for growing a successful business?
Without a plan you're travelling blind. With a plan you set objectives,
establish priorities, and provide for cash flow.
There are many good reasons for having a plan
* You need a business plan if you're applying for a
business loan.
Most banks require it, and even those that don't strictly require it expect
it.
They expect it to be a summary of the business, with some predictable key
points.
* You need a business plan if you're looking for business investment.
The plan won't get you the investment, but not having a plan will mean you
won't get investment. Investors require a business plan. They invest in the
people, the idea, the track records, the market, the technology, and other
factors; but they look to the business plan to define and explain the
business.
* You need a plan if you're thinking of starting a business.
* You need a plan if you want to significantly expand and grow.
* You need a plan if your business is in trouble.
* You need a business plan if you're working with partners. The business
plan defines agreements between partners about what's going to happen.
* You need a business plan to communicate with a management team.
The day-to-day business routine is distracting, problems come up,
opportunities appear, and commitments should be followed and tracked.
How do you know where you are in business without establishing where you
started and where you intended to go?
How can people commit to a plan they can't see?
* You need a business plan to sell a business, or to set
a value on a business for tax or other purposes such as estate planning,
or divorce.
The point of a business plan when you are trying to raise money is to show
investors that your business idea is both feasible and profitable.
No matter how much money you have to raise, remember that you are still
the biggest investor in your business-investing your time, your energy,
and your ideas.
You more than anyone deserve a solid business plan to guarantee your
success.
Not every business needs to raise money. In fact, many business ideas
require raising little to no money to get started. Perhaps you are even
providing your own money.
No matter how it raises money, every business should expect to earn money,
and you need a solid business plan to start turning a profit.
Sadly, many of the people who need a plan don't know they need it.
They get trapped by the myths of business planning. They don't realise
that plans are not just for start-ups, loans, or investment. They don't
realise that business plans are easier to develop than most people think.
To succeed in business you simply must plan the steps, set priorities,
allocate resources, and manage the cash.
Sure, some people say they don't plan, but if they're successful then
they're actually always planning in their heads.
But you can only keep that plan in your head if your business is
very simple, cash flow is always adequate, you don't work with other
people, you don't want to expand and you don't need to communicate your
business plan with other people either.
Don't try to run without a plan.
Doing a plan is probably much easier than you think, and much more
valuable.
The need for a business plan goes far beyond the need to raise money.
A business plan also helps you to:
* Clarify your products and services
* Set goals for the future
* Realistically estimate profits
* Identify your competition (and their strengths & weaknesses)
* Outline a marketing strategy
* Keep focused on the big picture
Whatever your dreams are, putting together a clear and thorough business
plan is the easiest and most helpful step you can take towards achieving
success. Even if you're not raising money for your business, you still
need a business plan tohelp keep your new business on track. Best of all,
you can write a business plan on your own terms and on your own time.
What are you waiting for? The route to success is to have a plan
and to pursue goals and take actions far outside your comfort zone to
make more money than you previously thought possible. Of course -
you're already ahead of the game. You've registered here because you
want to find out how to put together a plan for your fledgling business.
So what should your Winning Business Plan contain?
Here are some suggested contents:
* Executive Summary
* Business Background
* Products and Services
* The Market
* Marketing and Sales Strategy
* Profit Formula / Business Financial Model
* Objectives
* Management and Personnel
* Ownership and Legal Structure
* Financial Data
* Critical Risks / Potential Problems / Solution Strategies
* Summary The first and most important section is the Executive
Summary - you need to write this after your plan is complete.
Your Executive Summary is summary of the plan not just a table of
contents. It needs to be compelling.
Remember if the Executive Summary is not compelling - the rest of plan
won't be.
Starting tomorrow I'll go through these section headings - one or two
each day.
Then I'll deal with the Executive Summary at the end.

To Your Success in Business

Michael Cardell

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