Why Your Home or Small Business Needs a Business Plan

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A business plan is the backbone or spine of your business. There are many words which could describe your business plan; such as, a foundation, a master plan, or a blueprint for success; however, simply put it is a detailed outline or roadmap for your business. ItA business plan provides accurate planning to reduce uncertainty. The actual planning activity helps the entrepreneur to realize the hurdles & obstacles ahead, as it is basically about simulating scenarios for initial start-up and medium term business development and growth.

Some key reasons to have a business plan are:

  • It creates a vehicle to communicate what the business is trying to accomplish.
  • It is the starting point for discussions with investors.
  • It forms the basis to measure actual versus expected performance.
  • It provides an internal reference for the management team, both in terms of common understanding and benchmarking.

For most new start-ups, a business plan is a dual-purpose document used both inside and outside the business. New insights invariably emerge when an entrepreneur immerses them self into writing the plan and start seeking feedback from others. It’s important to recognize that the plan will usually change while being written. Moreover, the path to success is not always in a straight line.

Use the business plan as roadmap to determine where your business is now. For example, business background, present situation, projections, resources, and not the least competitor analysis. You should also use your business plan as a tool to look at actual verses planned, or as a benchmarking tool or reference.

Ensure you customize the your plan to suit your target audience. For Instance, a business plan may have variations for bankers or investors, suppliers or customers, contractors, or even new or potential employees and existing employees.

So now you’re really eager to get started, but before you start drafting or writing your own plan, please take some time to do an opportunity analysis. Consider the following questions?

  1. What is your product?
  2. What is the pricing?
  3. Is there a market for product? (sales channels)
  4. Who are your target customers?
  5. Who are your competitors?
  6. What does the management team look like? (who, experience)
  7. What is your cash flow plan?
  8. What are your financial needs?

An opportunity analysis will verify that the proposed enterprise is viable, before you spend time and money on doing a full-blown business plan.

Finally, as a home or small business entrepreneur, you want to ensure every chance of success, so a business plan will assist you and keep you on track. You really should consider a business plan when creating a new business or venture, or expanding an existing one.


Source by Stephen Dew

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