Why have a business plan?
Many new business owners write a business
plan with the sole
purpose of convincing a bank or investor to lend them money
for starting up. However, a good business plan can be useful
for other reasons. It can help you to:
- Bring together your ideas and research into a structured
format.
- Clarify your business purpose to yourself and communicate
it to any partners or staff.
- Predict future scenarios and address them before they
threaten the success of your business.
- Set out the strategy for your business and particularly
your marketing strategy.
- Set targets and objectives, including sales and financial
targets, so that you can monitor your business' performance.
Your plan should be a coherent description of how your business
will move from where it is now to where you want it to be.
Every business will be different, but the headings below are
useful 'stepping stones' to include in your business plan and
will ensure that you cover the most important issues.
Your personal objectives:
- Why are you in business and what do you want out of
it?
- Will the business supplement your main income or replace
it?
- Are you starting it as an investment, to sell as soon
as you can?
- Will your business provide jobs for family members?
The answers to questions like these will have an impact on
your business' aims, development and strategy. For example,
if you are starting a business as an investment opportunity,
the focus of your planning will be leading up to your exit
- the sale of your business. Your strategy must therefore focus
on building your business quickly and maximizing its value
to get the best selling price possible.
On the other hand, if you are building up a business for a
less experienced family member to take over, your plan will
focus on a succession strategy. This might mean keeping the
business small and easily manageable.
For most people, though, the aim of starting in business is
to provide a degree of independence, the ability to have some
fun and the opportunity to generate a reasonable income.
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