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Business 101

Regardless of the type of business that you have now, or one you may be thinking about starting, you will need a business plan. No matter what stage your business is in, a business plan is one of your most important documents and is vital to the continued success of your company.

What is a Business Plan?
A business plan is a description of your business goals and the strategy that you intend to use to achieve those goals. When writing a business plan, you may need to ask yourself some questions: What are some things that I would like to achieve in my business? What would I like my business to look like in five or 10 years? How can I learn to manage my business better in today's market?

Writing a business plan can help you answer these questions, and it can also help you reach your goals. As it is crucial that your business keeps up with the changing times, developing a plan is not a one-time endeavor, but an exercise that needs to be tweaked and polished over time. Each time you revisit your business plan, it may not necessarily be to change basic goals, but sometimes simply refining your plan to better reach these goals. This is an ongoing work of writing and rewriting the means and methods that are necessary for your business' success.

Aren't Business Plans only for Startups?
Some may think that a business plan is only for a startup business; however, the reality is that established firms need a written plan as well. Business owners should always be "planning the work and working the plan" to help stay focused on goals and current with the industry. While this article is just a brief introduction, you will see how business plans can expose areas that need more focus or changes, and it also teaches business owners the discipline they need to survive.

Also, it is much easier to manage a company with a plan rather than without. For example, a plan that includes a policy and procedure manual helps everyone in the company understand their work responsibilities and time off. Job descriptions are precise, and vacation and sick leave days are designated where everyone understands them.

It's also important to understand the financial concepts that it takes to run your business. All of that can be accomplished with a good business plan. Share your business plan with your banker or accountant to get their input. Utilize the old saying that "success comes with many counselors." Just make sure those counselors have your best interest at heart.

Types of Business Plans
According to Entrpreneur.com, there are four types of business plans:

The Miniplan
The miniplan is just that — an abbreviated version of a potentially larger plan. Miniplans typically cover the basics, such as financial needs and statements, projections and balance sheets, and a marketing plan. A miniplan is a great way to test a business concept; however, it is not sufficient for managing any business of significance or beyond the initial startup.

The Working Plan
This type of plan should be strong on the day-to-day operations and management of your business. This type of plan is heavy on how your business should run, and less on presentation formalities. This plan would be used internally and would not need anything fancy; it is plain and to the point.

The Presentation Plan
At the other end of the spectrum lies the presentation plan. While this plan is just as heavy with information, it should be set up and presented to appeal to an outsider, such as a banker, that you would like to impress. This plan will be stylish, appear in a professional and logical manner, contain colored graphics, photos and illustrations, and be printed on high-quality paper. While this holds true for every business plan, this plan needs to be consistent and accurate. When it comes to investors and financial institutions, you may only get one shot, so make sure there are no red flags.

The Electronic Plan
This is an electronic version of your working or presentation plan for the purpose of e-mailing or showing during a meeting. This type of plan is often set up in a slideshow-type presentation and can be useful for group meetings or whenever a quick version is necessary. The advantage with this version is that you can do some neat projections (the "what if" factor) and show the outcome immediately.

Remember, when it comes to e-mailing, make sure that it's exactly like you want it before pressing the send button, because you can't take it back.

Layout and Information
While a business plan varies from company to company, it should contain detailed information about your business concept, analysis of the market, and all of your financial information.

Your business plan should have ample information to accomplish the intended purpose for your business. Ask yourself these questions: What am I trying to accomplish? Will I be presenting my plan to potential investors and/or will it serve as a management and operations tool? The answers to these questions will determine the complexity of your business plan.

An example of the sections you might include in your plan are:

  • Summary
  • Business Description
  • Vision Statement
  • Operations
  • Products and Services
  • Market Analysis
  • Competitive Analysis
  • Strategies
  • Marketing Plan
  • Financial Factors

You may find that updating your plan at the beginning of every financial period, annually, quarterly or even monthly may be necessary. Following are just a few examples of why it would be necessary to update your plan:

  • Your business may need additional financing for an accelerated growth period.
  • There may have been a significant shift in regulations or market trends.
  • Product and technology changes.
  • Changes in management.
  • The employment of additional people or the addition of another department.

If your old plan just isn't relevant any more, then you need to update it.

Finally, don't be afraid of hiring a consultant or checking with governmental agencies or organizations dedicated to helping entrepreneurs. There are federal and state commerce departments that are helpful, as well as software and books that are useful in helping to create and implement your business plan.







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