How to write a Business Plan that guarantees success
This month we have a guest blogger with considerable experience helping businesses create business plans.Irene Didinsky writes this insightful article that is appropriately timed given that tax season is upon us.
A Business Plan is a key to success of any company, new or existing. A Business Plan serves two purposes, an internal management tool and an external marketing tool for potential funders and investors. As an internal management tool, executive staff can use the Business Plan to set objectives, make assignments, and track achievements. As an external marketing tool a Business Plan gives potential funders a detailed view of a project and how it will be carried out. Funders and lenders almost always require a copy of an organization’s Business Plan in making funding decisions.
A Business Plan is a company specific document and should reflect unique aspects such as founder’s relevant experience, ability to transfer certain number of clients from an old location, opportunity to decrease advertising costs by doing a barter transaction with marketing firm and many more. That is why a strong Business Plan cannot be written using pre-drafted templates or software packages. It is also recommended to have an independent party write a Business Plan as it may be hard for a business owner to be completely objective about her/his company. We can draw a parallel with the medical world where doctors cannot treat family members as emotions involved in operating on family members can obscure objective judgments.
Business Plans should be a work-in progress document. Even a successful fast growing company should maintain a Business Plan. Business Plan should be updated with any changes, e.g. acquisition of a new market or customer, introduction of a new product, changes in economic environment, issuance of a new law and the like.
A good business plan should tell a compelling story why the business will succeed. The plan should include not only strategic vision but also tactical steps to execute it. Although the format and content of Business Plans vary across, the goal of each plan is the same – to provide a concise and a comprehensive picture of a proposed venture.
A strong Business Plan should include these sections:
• Business Opportunity section describes market/business opportunity for a service or product that the company offers. This section should include a competition analysis and how the company will sustain it.
• Business Team section describes if the team can successfully execute the business opportunity. It summarizes the strengths of the team members and how they will be used in the opportunity execution. It lists team’s objectives in executing business opportunity. This section also describes sales and marketing strategy
• Pro Forma Analysis section includes detailed calculations of revenues and costs for the next 3-5 years. The calculations should be supported by clearly stated assumptions. If business is already established historical financial data should also be included.
• Exit Strategy section should describe how the founders will get their investment back over time and identify the terms and conditions when the time is right to sell or close the business
For more info contact:
Irene Didinsky
IHD Consulting
info@ihdconsulting.com
847-800-8349 cell
