What is a Business Plan? Why Do You Need One?
A business plan is a formal document that supports business operations for new, expanding, and existing/current businesses. Usually, entrepreneurs decide to create a business plan when they need funding to establish or expand their businesses. The business plan isn’t just a way to “get money.” Ideally, it serve as a guide for your business goals in the short-term, medium-term and long term.
No matter what the plan looks like, or how extensive it is, the business plan has to cover the company description, mission and vision, products and/or services, market analysis, operations plan (strategic and tactical – what you plan to do, and details of how the business operates), management team, and financial projections.
Here are a few areas of real, effective business plans used by successfully operating companies that are often overlooked by “boilerplate” business plan software and “free” business plans available over the internet:
- Real, reliable, in-depth market information
- Analysis of competitors
- Realistic financial and operations goals and objectives that are actual goals and objectives (measurable, time-related, specific)
- Organization charts that are realistic and applicable to the business
- A mission and vision that makes sense for your business
The business plan isn’t just about buying a document you can take to the bank or show to investors. It should be used to guide the real-world operations of your business. The plan also isn’t worth much if it does not reflect your real business. Lenders and investors have seen hundreds of the boilerplate plans that aren’t worth the paper they are printed on. They will not work with any business that shows them this type of plan and can answer no questions. Some of the plans have useless charts, or financial projections that are suitable for a report to shareholders. Neither of those is a business plan.
You will find many gurus and business experts talking about how you should write your own plan, and encouraging you to use the completely unnecessary and duplicative business plan software that is out there. You should write as much as you can on your own.
You absolutely need to know, and understand, every piece of information in the business plan. A loan officer, grant funder (in the case you are eligible for government or private grants because of your line of business or other qualifications), or investor will ask questions that could surprise you. You do not want to be caught off guard and be unable to answer a basic fact about your business that is in a business plan you have not really read in depth.
Which brings us to . . .
Why is professional business planning important and beneficial?
A good, real professionally-written business plan that is prepared by someone who knows funders and how to run a business sets forth your specific road map for success. The most important task for you is to run your business well and achieve the goals you’ve set forth — sales, net profit, customer development and service, product development, quality assurance, and more.
A truly professional business plan consultant will be able to understand your business, and communicate the products and/or services you sell to the funder, whether it is a loan officer, an investor, or a grant funder. The business plan consultant will also have extensive experience and knowledge to help you understand where your business fits in the marketplace. They will reflect your business in the best possible light.
You should be excited when you receive your professional business plan. It should make you feel proud when you see it, and it should inspire you to achieve the goals that it sets forth. You should be able to look at the plan, and update and revise it as your business grows and develops, and know that there is something tangible and concrete, that will give you the means and methods to achieve business success.
This template example comes from a website that’s full of Shamwow/Vince Shlomi hardsell. In this case, the $79.95 price for this business plan template set is probably the surefire “way to raise capital” mentioned by its creators, “Business Plan Fairy.”
You will not get very far with a real, professional business plan for $79.95, and the reason is: there are things you don’t know, that would take a lot of time away from what you should be doing (growing and operating your business) in order for you to learn. There are simply too many variable aspects of real-world business planning for any software program to strongly support it. Contact us to learn more about your business plan options and how to move forward.