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Is Your Business on Track for Success or Failure? Without a Business Plan You Have no Idea!Tip! Talk to anyone that has been deeply and personally involved in a real business failure, and they will likely tell you that things became very clear near the end. There is nothing like winding down a business after catastrophic failure to help you step back and really understand the big picture with remarkable clarity. In today's market, a business plan is one of the most critical documents in the development of your business. How can you expect to communicate your goals, or to gain investor funding without presenting a detailed business plan. If you were an investor looking to invest millions, would you move forward without first seeing a business plan? I doubt it! As an entrepreneur, I have learned this the hard way. Quite a few years ago with my first business in Arizona, I had a great idea and the drive but no business plan. We just moved forward and six months into the business realized we had a lot of problems. It was not that we did not do our initial research, resources in place, or even a good product. We just had no idea if we were doing good or not. This is because we had NO goals. What made it worse is we had a potential investor interested in our company; however, because we did not have a business plan to share with him it was a major red flag.
Regardless of the size of your business, having a business plan provides you with the following:
1)Set specific goals and determine how to measure them over the development of your business
2)Address upfront known obstacles and strategies for dealing with future obstacles
3)Cash flow and break-even requirements
4)Ability to focus and maximize resources when considering business decisions Before you begin writing your business plan, consider four important questions:
1)Where will you get the start up and ongoing capital start your business?
2)What service or product does your business provide and what needs does it fill in the marketplace?
3)Who are the potential customers for your product or service and why will they purchase it from you?
4)How will you reach or market to your potential customers? Tip! Many business writers. business consultants and business coaches attribute business failure to a lack of strategic planning, a lack of leadership, a lack of vision, a lack of processes, the list is endless. Elements to Include in a Good Business Plan:
1) Cover sheet
2) Statement of purpose
3) Table of contents
a. The Business
i. Description of business
ii. Marketing
iii. Competition
iv. Operating procedures
v. Personnel
vi. Business insurance
b. Financial Data
i. Loan applications
ii. Capital equipment and supply list
iii. Balance sheet
iv. Breakeven analysis
v. Pro-forma income projections (profit & loss statements)
3) Three-year summary
4) Detail by month, first year
5) Detail by quarters, second and third years
6) Assumptions upon which projections were based
i. Pro-forma cash flow
b. Supporting Documents
7) Tax returns of principals for last three years Personal financial statement (all banks have these forms)
8) For franchised businesses, a copy of franchise contract and all supporting documents provided by the franchisor
9) Copy of proposed lease or purchase agreement for building space
10) Copy of licenses and other legal documents
11) Copy of resumes of all principals
12) Copies of letters of intent from suppliers, etc Tip! The third business failure factor profiled in the report, and a critical one, was Marketing. Over 64% of the businesses surveyed in the Marketing category failed because of owners minimizing the importance of properly promoting their business followed by ignoring their competition. Unless you have developed a business plan before, after reading this article you might need some additional help. Fortunately, there are many resources available. There are lots of books, software programs, and Websites that'll walk you through each of the steps involved. We got you started; now it's up to you to make those business dreams come true. © Jay Feitlinger Amass Magazine Jay Feitlinger is an Arizona entreprenuer and real estate investor. Jay is one of the owners of Amass Magazine which is a monthly publication for those with the interest and financial capacity to invest in Arizona business and Arizona real estate opportunities. The magazine features Arizona business for sale to Arizona residential income property, land investments to commercial real estate, Amass is meant for the investor serious about accumulating wealth through Arizona-based opportunities. Visit http://www.amassmag.com for more information and other investing advice.
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