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Simple tips for achieving success
A business plan is a formal written document with objectives and strategic goals designed for achievement within a certain period of time. Putting together a business plan requires planning, and research of the current market and economic conditions. This article is written for those who are seeking direction and want to obtain the necessary knowledge to prepare their own business plan. Every business should have an updated business plan. This document is important because it sets the tone for the strategic planning and aids management to pursue business with a sense of direction.
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Most business plans have the following sections:
- Executive Summary – This is a concise narrative that answer who you are, and what do you want. You should state your business objectives clearly and pointing out any specific needs or purpose. This section should be at the most one page, writing too many pages discourage reading and most likely it will fail.
- Business Description – Inform the reader about your organization history, mission, vision, business objectives, how the business operates, products and services, locations, web presence and service hours.
- Market Analysis – Provide industry statistics, competitors’ information, and market share. Always do your homework, show knowledge; you can get information using census, business reports, and newspapers, among several others. Show the information creatively, for example, use graphs, maps, and other visuals. Data is best analyzed when it is summarized and well presented.
- SWOT Analysis – One useful tool available for business analysis is the SWOT; which stands for Strengths, Weaknesses, Opportunities and Threats. Preparing a SWOT for your business will serve you more than you think, because you will learn a lot of your organization. This analysis will provide a wealth of information to prospective people that might provide financing or are evaluating for a business partnership.
- Management – Introduce your management by providing information about professional experience, academic preparation, special skills, success stories and industry knowledge. Try not to prepare this section as a resume; instead, write paragraphs with the necessary information to show management capabilities and readiness.
- Human Capital – Describe the organization structure, use organizational charts, and other visual information. Provide information on key positions or special qualifications to deliver the products or services.
- Sales and Distribution Strategies – What are your products or services and how are you going to deliver them to your customer. Those are the basic questions to answer in this section. The reader must know, what are your plans for selling and your ability to sustain sales and satisfy the demand at different stages. This include the pricing and the distribution logistics.
- Marketing – Another section that requires you to do your homework. A marketing plan should provide information on how are you planning to reach your existing and potential customers. When and where ads will be placed, the logic behind the business, use different approaches at different times during the year, special promotions, coupons, social media, sweepstakes, radio, television, newspapers, and others. Having a plan means that you will use different strategies to motivate different groups of potential customers to buy your product and services.
- Financial Projections – Any business partner or banker, wants to know what management’s expectations are. This section must incorporate most of the information previously presented. A business with a strong projection or forecast is most likely to succeed since this section can assure possible investors that monies invested thru loans or capital will yield returns. When preparing the projections, be realistic and careful of not creating analysis that are not sustainable due to the industry composition or the current market conditions.
- Budget and Financials – If there are enough financial history, this section could be very useful and positive. Provide the last three to five years of financial budgets and actual financial results, audit results, and income tax returns. Having this information upfront and available show reliability and accountability; thus, improving your chances of getting approved or accepted in your new business venture.
For many reasons, several people opt to omit certain information on this list; however, most successful business plans provide as much information as possible. Probably, one of the worst reasons to omit information is the lack of knowledge or not doing the necessary homework to understand the market. To be honest, most bankers prefer having most of the questions already answered, since it shows a high level of commitment and understanding. At the end, most business plans are used for proposal and financing purposes more than any other possible use.
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