The Advantages of a Business Plan
For the potential purchaser and the operator (vendor) wishing to sell in the future, the benefits of a business plan is unequalled. Some prospective purchasers will hunt for the golden opportunity of buying a little run down place and then selling for a small fortune. However, for most of us to turn an honest dollar means working day and night at something rather more mundane. Worse still, many work away at their particular dream without any sort of plan at all.
Working without a business plan is like a bus driver asking his passengers where they would like to go after leaving the depot.
What is a Business Plan?
A business plan is a written document prepared by the prospective purchaser, individual business person, partners or shareholders that describe, first the objective of the business and second the steps necessary to achieve those objectives. A business plan offers at least four benefits:
- 1. The first and most important benefit is that a plan gives you a path to follow.
- 2. A plan makes it easy to let your financier in on the action. By reading the details of your business plan your financier will have a real insight into your situation if he or she is to lend you money.
- 3. A plan can help you develop as a manager and think about competitive situations and promotional opportunities. It can help increase an owner/manager's ability to make sound judgment.
- 4. A plan can be a communication tool when you need to convince others of your ability and requirements.
There is no general business plan for a new business. Neither is there an all purpose business plan for businesses that are expanding or changing direction. Each business venture has its own unique set of factors and conditions. However each business plan should consider the following questions as a minimum requirement.
- 1. What business am I in?
- 2. What products (or services) will I offer?
- 3. Where or who is my market?
- 4. Who will buy my product, goods or services?
- 5. Who and where are my competitors?
- 6. What is my sales strategy going to be?
- 7. How much money will be needed to operate my business?
- 8. How will I get the work done?
- 9. What management controls will be needed?
- 10. How can those controls be implemented?
- 11. When should I revise my business plan?
- 12. Where can I go for help?
Bear in mind that whilst you work through the steps your final goal is to put this plan into action and MAKE IT WORK.
When do you go about preparing a business plan? As soon as you have decided that you are going to be in business, but before you spend any of your hard earned money.