First of all, many people are wondering why they even need a business plan. It is understood in the business community that this is a requirement for anyone seeking funding, wishing to attract investors or to launch an idea to a partner or venture capital. With regard to everyone, it’s more than a document that transmits the business idea; This helps shape the viability of a business. Future corporate owners must understand, in particular within the difficult economic times, a corporate plan (or absence) can determine success or failure.
According to the administration of small businesses (SBA), only 50% of companies actually succeed in their first five years. In addition, about 75% of the company’s failures are due to financial reasons. A business plan should not only tell a story about the company and how it will attract customers, generate income, reach profitability, hire employees and acquire a market share, but it must also include Projected financial statements for a period of five years. It is important that future business owners understand the necessary financial commitment to maintain their business and be able to stay afloat during the low seasonality or difficult times.
Now, with all that says, the difficult part actually puts all these ideas and plans on paper. For starters, the company owner should define realistic goals and answer difficult questions.
What does the owner and the management of the corporate plan to be achieved (other than profitability)?
What is the target market and how does this undertaking differentiate from competition?
How will the company respond to changes in the market?
Does the company have enough cash?
What are the plans for future growth?
Write a business plan can be a huge company. However, if the owner focuses on a section at a time and retains realistic goals and ideas, a large plan can be created. Most corporate owners need help for the process and seek consultants and other external resources to help them put everything together. An ideal plan will be 25 to 35 pages and include achievable financial projections. Focused on objectives, realistic and achievable goals and complement an analysis (strengths, weaknesses, opportunities and threats) will keep the document to become a “marketing shop”.
Once a business plan is over, the owner can use this plan as a guide to success. As the company adapts to the market and / or customer satisfaction, the owner can continue to change the plan. In addition, the new owner may follow the financial results to compare the actual financial data to the projected financial statements. Once again, the owner can make changes to these projections to meet the needs of the company. Without business plan in place, the owner of the company and the management would be lost, similar to those of a ship that is out of the course without card or compass. You can simply imagine how it would end, right?
Thus, instead of repeating the work involved in setting up a business plan, just skip and get these ideas. Do not be afraid to ask for help and understand that “Rome has not been built in one day”.