I have a friend who just came out of a very long and tortured business partnership...long story...save you the bloody details...but apparently their partner's idea of a business plan wasn't exactly…let's just say unconventional....to put it in a nutshell "whatever drops in our lap"...yes, that's exactly what venture capitalists and investors love to read in a business plan. I could see many in the room leaping to their feet to throw buckets of money for that plan.
When you start any new venture, you must have clarity of your vision. It's so critical that you know your mission and vision. If you plan to make let's say a widget...great, make the plan, work the plan. Be clear in your objectives and be able to clearly explain your goals in simple words. Simple is not a dirty word, simple is well...simple. You do not need a 1000 page manifesto to tell the world you are going to change the world with the world's greatest widget ever! You just have to explain your plan in a way that a child would understand it, to a degree, of course. The vision and plan of your company and its plan must be laid in terms that give potential investors confidence that you have the ability to be trusted and you will take this idea to success.
You also need to have a business plan so that you and your partners, if you have any, know the road map that you will follow to success. Any company worth its salt must have a business plan even to obtain loans. It's a requirement not only for financials but just so there is a solid foundation for the business to follow.
Here is a great summary of a business plan outline:
- Business Plan Executive Summary
The executive summary is Part 1 of the business plan and is the most important section of your plan. It provides a concise overview of the entire plan, along with a history of your company.
- Market Analysis
The market analysis section is Part 2 of the business plan. This section should illustrate your knowledge about the particular industry your business is in. It should also present general highlights and conclusions of any marketing as well a SWOT (Strength, Weakness,Opportunity,Threat) analysis
- Company Description
The company description is Part 3 of the business plan. Without going into detail, this section should include a 10,000ft level look at how all of the different elements of your business fit together.
- Organization & Management
Organization and Management is Part 4 of the business plan. This section should include: your company's organizational structure, details about the ownership of your company, profiles of your management team, etc.
- Marketing & Sales Management
Marketing and Sales Strategies is Part 5 of your business plan. Marketing is the process of creating customers, and customers are the lifeblood of your business.
- Service or Product Line
Service or Product Line is Part 6 of your business plan. What are you selling? In this section, describe your service or product, emphasizing the benefits to potential and current customers.
- Funding Request
The Funding Request is Part 7 of your business plan. In this section, you will request the amount of funding you will need to start or expand your business.
- Financials
Financials is Part 8 of your business plan. The financials should be developed after you've analyzed the market and set clear objectives. That's when you can allocate resources efficiently.
- Appendix
The Appendix is Part 9 of your business plan. This section should be provided to readers on an as-needed basis. In other words, it should not be included with the main body of your business plan.
Flying by the seat of your pants, wishing, hoping and looking for signs in the stars...moon alignments and signals from clouds...isn't a business plan. It still takes hard work, proper preparation, planning and common sense to make your vision lift off to success.
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