When you are attempting to start a business it is essential that you have a well written business plan. Your business plan will be what spells out your goals, describes your business, and will be able to be a resume of sorts for your business.
Most business plans are comprised of seven parts that include the introduction, executive summary, table of contents, the organization plan, the marketing plan, financial documents, and supporting documents. While some business plans may contain less or more information, as a general rule you will need all seven parts.
Many would be entrepreneurs will attempt to skip the writing of a business plan and will cite such excuse as they do not have enough time to write one or their industry is too fast paced and changes too much to warrant one, but this type of thinking can be business suicide. A well written business plan is what is going to spell out your business. In other words, your business plan is you set of blue prints that you will need in order to construct your business.
Before you set out to write your business plan you should address four critical questions. These questions are:
1. What services will your business supply and do these services fill a need?
2. What is the target audience of the business and will this audience buy what you are providing?
3. How will you reach out to your target audience?
4. How will you fund the start of your business?
Answering these questions about your business will help you when it comes time to actually write your business plan. This is critical because you may need to seek finical help in order to start your business and a key component to almost every loan application for a business is a business plan.
The basic financial components of your business plan should include your current and your pro forma balance sheets, an analysis of your cash flow, and an income statement for your business. These are crucial components of the business plan as this is what finical institutions will look at very closely when deciding whether or not to loan your business any amount of money. Additionally, many vendors that work on a credit basis will ask for a business plan and look at these same areas before they will deal with your business.
Your business plan will be required in many circumstances when it comes to your business. Just as you would not want to go about any important endeavor without a plan, the start up of your business is no different. Without a business plan that is well written and contains all the important elements you will find it near impossible to get any financing for your business and that in turn may see the goals that you have set forth for your business fall well short of expectations. While it may be tempting to skip it all together, if you are serious about your business start up then a business plan is essential.