Planning in business is difficult. More often than not, small-business owners-managers are so busy conducting business that they don't have time to think about planning, much less write a plan. Although this aspect of business management is one of the most difficult, it is also one of the most important. A written business plan provides direction and operational guidelines, allows the company to act and react quickly and provides a sense of direction and unity for employees and managers alike.
Planning, or the process of determining objectives and the activities necessary to achieve them, helps to assess the current state of the business, and where the owner-manager wants to go and how to get there. It takes time, energy and patience to draw up a satisfactory business plan (the reason so many small businesses don't have them).However, business is no place for pretenses. Don't just go through the motions. It is important to know precisely what business is being conducted, where the market is, who the customers are, who the competition is, and what product or service the company the company provides. Nobody but the owner-manager can determine this information.
An outline for a business plan is as follows:
1. Cover sheet: The cover sheet should include the name of the business, the address, telephone number and the names of the owner-managers or principals.
2. Executive summary: The executive summary is a brief, clearly written statement of purpose that summarizes the business plan purposes and objectives.
3. Table of contents: This is a one-page overview of what the plan contains and is written in outline form.
4. History of the business: Discuss when and by whom the business was founded, as well as how the idea for the business was de-veloped.
5. Description of the business: Provide information regarding the type of business being conducted, why this business is conducted, what the business will look like in one year and in five years, and list the special requirements needed, such as licenses or permits, to conduct the business.
6. Market analysis: The market analysis helps define the target audience and area of the business. It should also indicate the percentage of the market belonging to the business now and include projections for the future. Further analysis may include growth potential, how the market will be attracted, how products will be priced, how credit sales will be handled and a description of the competition and how it compares.
7. Operations and location: Indicate who is responsible for each aspect of operations, as well as who the firm's suppliers are. Also, describe the address and existing physical features of the business's location and any changes which need to he made to facilitate operations.
8. Product description: This section should describe all existing and planned products.
9. Management structure: This part of the plan describes the experience and expertise of the owners and/or managers. It should indicate salaries and wages, as well as outside resources that will be utilized. Resumes should be included.
10. Financial analysis: Provide information about what revenues have been and will be, and what it costs to run the business. Financial statements and budgets should be included. If outside financing is being sought, there should be a description of what the funds will be used for.
11. Appendices: Some important supporting documents which should be included are an organization chart, letters of reference, copies of leases, contracts, and agreements, and any other information which may be used to help your cause or answer ques-tions.
Once the necessary information has been obtained, the business plan can be prepared. It should be written clearly and concisely. Be creative and honest. Give the impression that the business is (or will be) stable, profitable and en-during.
Although a business plan is beneficial for obtaining outside financing, it is also a valuable blueprint for successful operations. The process of writing the plan is an excellent way of focusing on a com-pany's goals, setting performance standards and determining some problems which might be encountered. It should be revised and updated frequently. Preparing a business plan is one of the most difficult things a small business owner will have to do, but the time and effort will be rewarded substantially by the increased efficiency, unity and direction the company will experience.