A quick nine-step guide to your business plan

Do you really need a need a business plan? Of course you do!

Businesses that have a business plan are far more likely to succeed than those that don't. You need a plan that covers everything. It must be functional and useful. It must be a working plan.



Your business plan might be one page. Excellent work. It might be twenty pages - that's fine, too. Your business plan should be as detailed as it needs to be in order to be useful. Because being useful is the bottom line.

Just what should a good business plan contain? Here is a quick nine-step guide to what you will need in your company's business plan:

1. An executive summary outlining goals and objectives.

The executive summary introduces your business strategy and probably is the most important section when approaching banks and other lending institutions. If you can't persuade a loan officer in the first two or three pages that you've got a viable business proposal, you're going to leave with nothing. This summary is also important as a communcation tool for employees and potential customers who need to understand - and get behind - your ideas.

2. A brief account of how the company began.

Explain clearly the origins behind the company's creation and you or your business associate came up with the idea behind the business.

3. Your company's goals.

Take a few paragraphs to explain your short- and long-term goals for the company. How fast do you think it will grow? Who will be your primary source of business? Choose a specific future date (three years ahead works well for most people) and describe what your business will look like.

It is often helpful to work backwards, for example 36 months, 24 months, 12 months, six months, two months and one month. Make sure your goals are specific, measurable, action-orientated, realistic and time-bound.

4. Biographies of the management team.

The management section should include the names and backgrounds of lead members of the management team and their respective responsibilities.

5. The service or product you plan to offer.

A key aspect of this section will be a discussion of how your product or service differs from everything else on the market.

6. The market potential for your service or product.

To do this you will need to undertake a program of market research, particularly primary market research, and have a close look at your competitors.

Remember that you've got to convince the bank manager/ financial lenders, employees and others that the market you're after is relatively large and growing. You'll need to do some research for this section. If its a locally based business, you need to assess the demand for your product or service within an xx-mile radius, based on what you determine is a reasonable distance from your business. If it's a Web-based business or a business that relies on both the Internet and local traffic for revenues, you'll need to evaluate demand on a local and/or a national basis. A research report from such sites as Forrester Research or Reuters can cost hundreds to thousands of pounds. But you may be able to get some basic information simply by using the Web and its many search engines and directories.

7. A marketing strategy

How do you plan to tell the world you're open for business? Will you rely exclusively on word of mouth (not a good plan unless you've already got a reputation)? Will you advertise in print, television or on the Web (or all three)? Will you use online marketing tools to get your company listed on search engine and advertised on other Web sites? You'll also need to include how much you plan to spend on marketing.

As well as your market research, advertising and promotion are things that will underpin your sales forecast. After all, if nobody knows about you, you're hardly likely to be successful! The degree to which your forecasts are met will be substantially dependent on. firstly, developing a set of appropriate marketing actions and scondly, successfully implementing them.

8. A three- to five- year financial projection.

This section should include a summary of your financial forecasts, with spreadsheets showing the formula you used to reach your projections. You'll need balance sheets, income statement and cash-flow projections for the entire forecast period. The summary in this section is also where you would tell prospective financial lenders how much money you'd like to borrow to cover your startup costs. The assumptions that you make in this section will make or break your company's succes. If you are unsure about using this kind of financial modeling, find a professional. It's worth the money.

9. An exit strategy.

All good business plans include a section that lays out the benchmarks you'll use in deciding to call it quits. The strategy could be based on a monetary figure, revenue growth, the market's reception to your idea, or a consensous among top managers.
Taken From(http://www.freshthinkingbusiness.com/business-plan.html)