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Why write a business plan?
The good news is that sitting down to write a plan need not be difficult or complicated, and in this section of entrepreneurbeginner.com you’ll find a number of useful hints and tips to follow. I’ll also be honest about what you need to do, and try to avoid anything that will waste your time. The first thing to consider is why you are going to write a plan. There needs to be a clear benefit. Many entrepreneurs write a business plan for a bank and not for themselves. This is a mistake. A good plan needs to be a useful document for YOU above all else. Business plan software
If you feel that starting from scratch on a plan is too much for you to handle right now, then click here, (LINK COMING SOON) where I discuss business plan software, which will provide you with a summary of the pros and cons of using something off the shelf, and let you know what’s available out there, and whether I think it’s worth considering.
Fail to plan, plan to fail!There’s a famous saying in the entrepreneurial world, and it goes like this... “fail to plan, then you plan to fail.” And it’s true. The beginner entrepreneurs that I have worked with, and who have turned out to be the most successful, have been those who have taken a lot of time to plan their businesses, and continue to follow their plan as they progress from month to month and year to year.It’s important, right from the start, to recognize that a plan must never be “fixed.” Frankly, (and I bet this will cheer you up) it’s never finished. It will need constant attention and changes. Why? Well, when you first write a business plan, there will be a lot of untested assumptions contained in it. Things that you think or hope will happen a certain way. As time goes on, and your business develops, you’ll notice that some things didn’t quite turn out the way you thought they would on your plan. Some things will be better than you thought, others (unfortunately) may be worse. That’s how life is. When real things have happened, perhaps on a monthly basis, you should revisit your plan, and with the valuable benefit of hindsight, make it even more realistic. A plan that reflects the real world accurately, is always the best one to rely on. How to write a business planTo dive into the nitty-gritty of actually sitting down to write a plan and what it needs to contain, click this write a business plan link.Some beginner entrepreneurs unfortunately find the whole process a chore, and once they have managed to cobble together a plan that does just enough to satisfy the bank and get them a loan, they chuck it in the drawer, never again to see the light of day. Mistake. Big mistake. So, let’s start by considering what the benefits are to YOU before you sit down and write a business plan (and hopefully give you some reasons why it’ll be time well spent) because, trust me, done properly, it is... Your benchmarks for success
First and foremost, having a plan will give you benchmarks to measure your developing success, and how well you’re doing against your aspirations. It’s like a route map, showing you where you’re going, how you’re planning to get there, and how long it will take.Here’s a simple example of why I recommend that, even if you don’t want to borrow money, you still need to write a plan: Picture an athlete training each day to run a 100-yard sprint without a stopwatch. The athlete might THINK he is getting faster, but has no clear way of knowing. How much faster? Am I fast enough to reach my target? To win a race? Without that stopwatch, there’s no way of knowing. So what happens? Gradually the athlete loses interest in the task OR assumes wrongly that he has achieved it. I know it’s a wacky comparison, but I think it does demonstrate how some sort of measurement device (a plan in our case) needs to be put in place. Measurement is important. You need to work out how much money you need, what you’ll use it for and when, and how much money you plan to make and when (the enjoyable part). If you get into the right mindset, it’s good fun! Sample marketing plansThere are a number of elements within a good, useful and realistic plan. One of these is, of course, marketing. Click on this link (LINK COMING SOON) where I discuss sample marketing plans and what I think of them.What do banks look for in a business plan?When you write a plan, its saves lots of effort if the one document can please both yourself and also the banks. The good news is that all major banks have similar outline criteria when it comes to lending money on a plan. Follow this link (LINK COMING SOON) to learn what criteria banks are looking for in a business plan.
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