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Why and How Write Business Plan?

business-planA strategy for success is your vision of where you need your business to go and how you’re going to arrive. It’s a guide and, similar to a guide, it archives the course on paper, rather than just confer it to memory. A reasonable, composed arrangement is as critical to your prosperity as a set of diagrams is to a home engineer. Without it, building turns into an errand.

As irreplaceable as it may be, unless you’re utilizing it to secure capital or financing, it needn’t be excessively unpredictable and debilitating. So we should make it simple. We’ll cover some fundamental rules, enough to help you make one you can utilize.

Here are six sections you should write into your business plan.

# Company Profile

This is the first section you’ll write because it drives the remainder of your plan. What is your company’s mission? What are you trying to do? This section describes why you’re in business. If this section reads “I’m in business to make money”, you’re in trouble. Any company can say that. Instead, the profile section should describe how you’re going to meet the needs of businesses or consumers in such a way that you can make money. You make money by

1.meeting the needs of customers

2. at a price they’re willing to pay

3. at a cost at which you can make a profit

# Market Anaysis

A critical component, this section should demonstrate your knowledge of the market in general. It involves thinking about what you can do better than others in the same business, and honestly acknowledging what can they do better than you. Look at your competitors,
compare them with your company. What you’re looking for is what Xerox called a USP, a “Unique Selling Proposition” and what I call a JND, a “Just Noticeable Difference” that makes you unique or different.

How is your industry doing? Is it growing? Shrinking? Are there barriers to entry that will keep others from offering the same product (service)? Are the big boys moving into your territory?

Also consider : Is your competition local, regional, national or global?

Consider external factors over which you have little or no control, such as the economy or
changing laws or regulations.

# Marketing Plan

This section outlines your sales strategies. You’ve got something to offer. Here you describe how you’re going to let people know about it. Advertising? Press releases? Direct mail? Word of mouth? Flyers? A blimp?

Take whatever is unique about your business (your JND) and make it the hero. Use it to develop a positioning statement, such as “I will be the cheapest source of this product”, or “I will add more value to the customer relationship than my competitors”, or “I’ll deliver it faster than my competitors”.

Consider how you’re going to obtain new customers and how you’re going to keep the ones you get. What are your goals for new business development? How many customers do you want? How many can you handle?

This section also encompasses new product (or service) development. What will you introduce during the coming year? When and for how much?

# Financial Plan

This section addresses your short-term and long-term financial goals. It might be the least fun but the most important section of your business plan. You don’t have to be an Excel genius to do it. Here you determine your company’s start-up cost (if new) or overhead costs (if it is an existing enterprise). You look at pricing and potential for profitability.

Your budget also is contained within this section. What are your fixed and variable expenses? List the various expenses and estimate how much you’re going to need each month. How much can you afford for advertising? You also outline equipment purchases, like a new PC or
printer, a Zip drive or a new telephone.