One of the key things I want to get everyone who reads this article to do is rethink (or think about in the first place) what a good business plan is and what is involved in putting one into writing. The bad news is – it will take time and effort – you’ll have to engage the strategic thinking part of your brain. The good news is – it’s not as hard as you think and there are numerous resources available to you to if you feel as though you’re not up to the task of putting it all together yourself. You never know, you might even find a friendly, helpful business banker that would be willing to point you in the right direction.

Essentially, there are three key elements to a good business plan. Remember, I am speaking from the perspective of the guy that is going to be putting your application together and submitting it to the bank’s credit people. There are literally hundreds of books, articles, websites, blogs, etc. out there that will tell you what “has to be” included in a business plan. At last check, a Google search of the term “business plan” returned about 195 million results. The fact of the matter is, whatever the format, whatever the content, you need to have a business plan – full stop. It can always be updated, amended to suit the audience (banker, investor, customer – whatever) and should be constantly reviewed to make sure it is a document that you can use in the day to day management of your business. That being said, let’s look at the three elements of a good business plan.

A Good Business Plan Has a “School of Thought”

Some people call this “vision” or a “mission statement”. I call it a School of Thought because, to me, you need to have a more expansive idea of why your business exists than just a catchy one-liner or slogan, which is what so many vision/mission statements have become. It’s good to be able to boil your School of Thought down into a single idea or even a sentence, but you have to have some meat on the bone. Your School of Thought should consider what you do best, why you do it and how you’ll go about executing it. It’s your philosophy, your guiding principles, your world view. Having this sort of thing written down will allow you to refer back to your core values when making important business decisions, basing them on the things you find most important rather than on emotional responses to an ever-changing environment. And from a banker’s point of view, it will help with understanding your company’s history or background and what makes your business different from your competition (and every other business out there looking for money).

A Good Business Plan Has a Strategy

Strategy is a word that has been turned into a “buzzword” and has almost become an industry unto itself. Looking up “Business strategy planning” will return you over 43 million results on Google. But like many aspects of running a business, strategy doesn’t need to be overcomplicated. Having a strategy simply means that you have thought about how you are going to turn your brilliant business idea into something that will generate revenue. Strategy is about how you’re going to do business and about setting goals that are well defined and measurable. Strategy, if it is going to be useful, is about execution. The best business idea in the world is useless if you are not able to define how you’re going to turn it into an enterprise that will make money. And the best strategy in the world isn’t worth one dollar if you aren’t able to effectively execute it. The precise elements of a business strategy will vary depending on what your business is. But a good strategy should always have these characteristics:

o It’s Robust. That means it’s sufficiently detailed to allow someone else to be able to execute even it if you’re not there to explain it.

o It’s Relevant. That means that it’s been reviewed in the last 12 months (max) and takes into consideration current conditions in the business environment.

o It’s Dynamic. That means it isn’t stagnant. It should be able to be adapted to changing conditions on an ongoing basis.

o It’s Consistent with your School of Thought. That means it is reflective of the core values of your business. A strategy that is inconsistent with your School of Thought has little chance of being executed successfully.

o It’s Innovative. That means you don’t make your strategy a carbon copy of someone else’s. Too many business owners make the mistake of copying some other business when it comes to strategy. What works in one organisation may not work in yours. Be creative.

A Good Business Plan Has a Good Handle on the Numbers

Everyone should have seen this one coming. The all important numbers. They can’t be ignored. You will have to show the bank that the numbers work out on paper even when you take into consideration the impacts of the real world. If you’ve been in business for a while, you’ll need to show them your historical figures – usually the last 3 financial years at a minimum. And regardless of whether you’ve been in business before or not, you will most likely need to provide three-way financial projections. If your reaction to that last sentence was “three-way WHAT?” – don’t panic. Three-way financial projections are simply a forecast of what your 1) profit and loss, 2) balance sheet and 3) statement of cash flows will look like for the upcoming financial year. Three-way can also refer to the fact that this forecast information takes into consideration 1) a best case scenario, 2) a worst case scenario and 3) a most likely scenario. For most business owners, having these forecast numbers put together will require the assistance of a good accountant. Make sure you get an accountant that is not only confident in his ability to put these numbers together for you, but one that is also willing to help you get some personal insight into what it all means. (A good question to ask that will sort the good accountants from the average ones is: “What are the key drivers of my business and what can I do to have a positive impact on my business performance?”) This forecast should become the monthly budget that your business works to over the upcoming financial year. If you don’t understand the forecasts, they won’t be very useful to you as a management tool. And remember, you’ll be the one trying to explain it all to your business banking manager. You must know what you’re talking about!

Now I know that the mere mention of the words “business plan” is enough to make most business owners cringe. They instantly conjure up images in their minds of endless pages of tedious, mind-numbing details that will take way too much effort to put together. In fact, most of the people I’ve spoken to that don’t have a business plan for their business have told me that they’re just “too busy” to put the time and effort required into writing a business plan. On the other hand, those whom I’ve spoken to that DO have a business plan mostly fall into the category of those that were required to write a business plan so they could apply for a loan from a bank. Of those minority that actually have a business plan in place, most of them would admit to not having touched it (or in some instances even seen it) since submitting it to the bank with their application. One of my goals is to get everyone to think again about what a good business plan is and what is involved in putting one into writing. It is not nearly as arduous as everyone imagines, and it is a critically important exercise for every business owner. As a first step, consider the fact that not having a business plan is an almost guaranteed way to ensure that the bank won’t want to back your business. The old cliche is true; failure to plan really is an indicator that your business is planning to fail.

If you can get a business plan together that has at least the three elements detailed above, you will be able to go to your bank with greater confidence that your loan request will at least be taken seriously. It will give you instant credibility if you put it together with some care and a bit of effort. And if you actually utilise the plan regularly as a management tool, you will become more and more familiar with some of the key elements of your business that will lead you to make better business decisions.

If you are serious about the success of your online business then you need to find ways to give yourself every advantage you can over your competition. Writing a business plan for your company can be a crucial step in getting your profits to where you want them to be.

I. It is one of the best ways to motivate yourself and plan how to drive your business to the next level.
2. In case your business is just an idea in your head for a long time, writing a plan will materialize it.

A business plan can serve a couple of main purpose

In terms of revenues if you have to reach to a bank for the money, the plans that has already sorted out the investment you will need? And what is your contribution to it? Can be figured a head of time.

Briefly you need to know the following:

1. Your entire business plan
2. Description of your business
3. Your Markets Strategies
4. Competitive analysis of your market
5. Development of your plan
6. Managing your business
7. Finances of your business

Your entire business plan:

Your entire business plan should include the key points of the product and its benefits to your market and you. How much you think is the start up cost and how much profits your are expecting. A brief description of financial aspect. How do you see your company will operate as a result of working with this plan, in other wards the progress and achievements that you will see in your business. What have you done to start your business so far.

Description of Your business

This will include details about your product and your market. A plan of operation day to day activities to run the business. How will you manage all aspects of business doing it by yourself? Or you are expecting some help. How do you feel about your product.

Your marketing strategies

This part of your business plan includes your thoughts about marketing your product. Your target audience how will you market them. How will you introduce your product to them and when. What economical methods you are going to use for this on line plan.

Competitive Analysis of Your Market:

Here you will write about your competitors that your product will compete with. What are their strengths and weaknesses. An honest analysis is very important, so you may not see a set back in your business once launched. Alexa is a great place to look for that. This website will tell you about the amount of traffic your competitors are getting.

Developmental plan or Operational strategy:

Depending on the rest of the business plan in this section you figure out how to profit with your business from the very first day. How much sale your planning and advertising can grab depending how deliberately you planned your launch and how will your market react to your plans. This can also include making your operational schedule, planning your advertising before your product comes in the market and your product awareness.

Managing your business

This is the plan that is important for two reasons. In case you need more people to manage your business, this is where you introduce the team and their special contribution to your business. In case you have a lawyer or a consultants mention them here.

Finances of your business:

This is a very important part of your business plan. As after all a business is all about making money with it. The more profits you make the better it is. Now since you are only writing a business plan, you have to be very realistic and figure out your expenses before starting. Create statement forms and balance sheets for the capital investors. In case you do not need this only monthly income and monthly expense sheet is enough for you to figure out all the details of the business.

Once you have written your business plan you will be amazed you will be able to refer to it whenever you felt too involved in one aspect of the business or when you felt lost where to go from here. Writing a business plan can be a great way to see things in action. A business plan brings you closer to reality.
Makes you feel your goal is a reality to be working with your business soon.

When you start a business, it’s an exciting time. You are passionate about your big idea. You can see it clearly in your head. You know what you want to do. You just need to get on with it. Sound familiar?

Yet one of the main reasons so many new businesses fail isn’t necessarily because the idea was flawed. One of the biggest reasons they fail is actually because they didn’t have a clear plan. The plan is what moves you from ideas to action.Those that have a plan have had the discipline and foresight to really think through their ideas and how they are going to work.

So 5 important questions to ask yourself as you write your plan?

1. For what purpose are you writing your plan?

Sounds obvious but is it? The way you write your plan will vary depending on whether the aim is to attract outside funding, to provide a focus & direction for growth or simply to get you started.

It’s amazing that many business owners simply don’t have a plan, or if they do, they did it once and then filed it away. Yet if you make your plan the record of WHY you are in business, the goals you have and HOW you are going to achieve them, it becomes so much more meaningful.

Make your plan a living document so it that becomes an invaluable tool. A tool that you evolve and adapt as your business grows and as conditions around you change. It is your roadmap that sets out the direction you are going and how you are going to get there.

And keep it short, who needs some consultant type lengthy tome that sits on a bookshelf to gather dust. Stick to the main points and make it relevant to how you will be running your business.

2. What are your goals?

Set yourself and your business clear goals. The acronym SMART is a useful tool to get things going

• Specific: The more specific the goal the better. How much money do you want to make each week/month? What level of sales do you need to generate that sort of income? How big does this business need to be to afford you the lifestyle you want to achieve?
• Measurable: If it can’t be measured, it can’t be managed. In context of the business plan, it could be to establish a business with revenue of $ 1m within 3 years. You can then break that down to shorter term goals and construct a marketing & sales plan to get you there
• Attainable: The goals you set need to reflect the capabilities and competencies that you have in your business. There’s no point in setting goals that are not attainable You want them to be a challenge, as it encourages us out of our comfort zones, but not impossible
• Relevant: How does it fit with your vision for your life and business? You want goals that are relevant to the life you want to lead and the values/belief systems that govern how you behave.
• Timely: All goals need to have timelines attached to them as otherwise they don’t happen. It creates a focus and sense of urgency.

3. Which market will you focus on and which niche to dominate?

The most fundamental question is WHO are you marketing to, and WHAT is their number one problem or frustration. You don’t want to just see who turns up. That’s like trying to practice archery with a blindfold on. Better to have researched the market, so you are clear on whom you want to focus your efforts on.

So often by narrowing your scope you expand your appeal. Most companies have limitations in their resources and for small businesses this can be a real challenge when competing in large markets. For a small business you don’t often have the budgets to compete on the same level with the big boys and so need to be realistic about where to compete. The importance of targeting to your success cannot be overstated enough.

The most successful clients of ours are those who have found a highly specialised niche in their broad ‘market’ and have then adapted & developed their product/service to specifically meet the needs of that market.

4. On what basis are you going to compete?

You start with WHO you focus on, WHAT you provide or HOW you provide it. HOW are you going to solve their problem in a way that is better or different from everyone else?

The choices you make in response to your own unique situation and the market environment you will be operating in. The question is how best will you build and sustain a competitive advantage. Being all things to all people is not a recipe for success so how do you avoid getting stuck in the middle and carving out a compelling position. You could choose to be different and uncover a missed opportunity or simply to be better on a dimension hugely valued by your market. You could choose to do either but for a particularly well defined niche. Or maybe there are options to lead on cost.

Each has very different implications for your business and it is these that need to be worked out at an early stage to decide which will work best for you.

5. How are you going to make money?

Way too many business owners do not actually clarify how the business /revenue model is going to work and indeed whether it is able to generate the level of return they need to fulfill their life goals.

You have all these great ideas but have you ever asked whether people want to pay for it? Are you clear as to what capital you will need to keep you going at the start? Have you got enough funding to cover the business until the cash starts to flow in?

The business model you outline in your plan is the core to whether the business is going to be viable or not.It’s not just about the products or services that you are going to sell. It is about the configuration of value. It’s about your cost structure, revenue streams, channels, operations and resources.The business model needs to identify how value will be created and gives it a structure as to how that will be converted to revenue.