Business Plan - Part I
1. Why Write a Business Plan?
What is a business plan, really? A business is a multifunction tool. It serves as a blueprint, a yardstick, and an advertisement for your fledgling business idea. A business plan (and the process of writing one) will help you:
· Refine your business strategy and look at your business idea from multiple perspectives. By following a disciplined process to craft your business plan, you will develop, evaluate, and optimize:
The features of the product or service you are offering.
o A plan to market and deliver that product to your customers.
o An organizational and operational model for your business.
o A convincing picture of the potential profitability of your endeavor.
o A realistic assessment of the risks your business will face.
Raise capital to start or support your businesses. It would be nice if you could convince angel investors to write you a check based on a five-minute pitch in an elevator. In reality, a well-crafted business plan is the tool potential investors and creditors use to help them evaluate competing ideas and determine which idea will offer them the best return on their investment. Trying to sell your business concept to investors without a detailed business plan to substantiate your ideas is like trying to catch fish without a worm. Your business plan must persuade potential investors that you, and your idea, are a sound investment.
Keep your company on track. Many entrepreneurs mistakenly think that a business plan is something they create in order to obtain start-up funding, and once that goal is accomplished they put the plan on a shelf to gather dust. Actually, a good business plan is a living document that you can use to assess the performance of your company over a period of time. Your plan can help you establish and monitor progress towards benchmark indicators of success and understand and evaluate the impact of ongoing changes in strategy or approach.
2. When to Write a Business Plan
From Concept to Reality: A good business plan is the scaffolding that supports your business idea as you move it from concept to reality, taking it through the following steps:
Identify or create the business concept. This is the "aha" stage of the business lifecycle. Here, entrepreneurs first conceive of their business ideas. They might jot notes on a paper napkin, run their ideas past friends, or start looking around on the Internet to see if anyone has tried the idea before.
Refine the business concept. At this stage of the game, entrepreneurs start to do some real research and analysis to examine the feasibility of their business ideas. Along the way, they make discoveries or spot opportunities that help shape and define the business concept.
Develop the business plan. Now entrepreneurs put pen to paper. In the process of writing a business plan, entrepreneurs further refine their ideas, craft roadmaps to business success, and work to develop a persuasive case that their product or service is the "next big thing."
At this stage, entrepreneurs use their business plans to convince potential investors and creditors that investing in their business concept is a good idea. Entrepreneurs need to raise the money not only to get their businesses off the ground, but also to keep them afloat while waiting to earn big profits.
Don''t forget to see the other parts of this document here on SHVOONG for simple, easy to implement, rules for successful Business Planning!