A business plan is one of the most important keys essential to business success. As a navigational tool, it can steer entrepreneurs towards growth and profitability
Constructing a good business plan could mean the difference between attracting the right investment for your business idea and establishing a comprehensive guide of what your business would like to achieve with regards to successful growth and profitability; and ending up another statistic with the number of companies that fail before they are even able to spread their fledgling wings.
A Navigational Tool
A business plan is not just a tool to attract investors but is the company’s first strategic planner that will enable the entrepreneur to conduct detailed analysis of financial and organisational assumptions; and by doing so can discover fatal flaws or contradictions that may hamper business success. As the company grows, the business plan must be updated and realigned according to the strategic direction the company would like to take.
Essential Key Elements of a Plan
Initially, writing a business plan may seem daunting and most entrepreneurs reluctantly embark on the task. If the task seems too overwhelming, easily downloadable templates and organisations that offer advice on writing business plans are in service; Professional experts are now offering their services to write business plans for reluctant entrepreneurs. Despite all the different and varying formats, business plans must include the following essential key elements:
- An Executive Summary
- The Management and Organizational Structure
- The Service or Product Offering
- The Marketing Plan
- The Prospective Financials
- The Forecasting Schedule
No part of the business plan is less important or should be less thoroughly researched than another. It remains a solid design of the companies planning and goals, and should be meticulously constructed to the last detail.
Mistakes to Avoid
Despite it being the most important document a new entrepreneur will ever write, most new entrepreneurs fail to understand that their business plan is an extension of the company. A poorly constructed plan will present a negative image to possible investors. Some likely errors that new entrepreneurs should avoid are:
- The presentation of a handwritten business plan with poor vocabulary, spelling and grammatical errors
- The omission of pertinent information regarding certain facets of your business, due to poor knowledge or lack of facts
- Inundating the business plan with industry jargon; on the assumption that the investor is an expert in the chosen industry of business
- Basing financial projections on costs and revenue on personal bias rather than on industry knowledge and research
- Failing to record progression timelines, negative facts and prospective competitors in order to present a rosy view of your company’s proposed success
A business plan has no timeframe, no set defined number of pages and is not rigidly fixed to today’s industrial conditions; but is a fluid document that will evolve with the company and provide a very valuable point of strategic reference for future growth and profitability.