The Company Business Plan – A Summary Guide and Road Map to Your Future Success

First off, a lot of people wonder why they even need a business plan. It is understood in the business community that it is a requirement for anyone seeking financing, wishing to attract investors or to pitch an idea to a partner or venture capitalist. As far as everyone else is concerned, it is more than a document that conveys the business idea; it helps shape the viability of a business. Future business owners need to understand, especially in rough economic times, that a business plan (or lack thereof) can determine success or failure.

According to the Small Business Administration (SBA), only 50% of businesses actually succeed during their first five years. Additionally, approximately 75% of business failures are due to financial reasons. A business plan should not only tell a story about the business and how it will attract customers, generate income, achieve profitability, hire employees and gain market share, it also needs to include projected financial statements for a five year period. It is important for future business owners to understand the financial commitment needed to sustain their business and to be able to stay afloat during seasonality lows or hard times.

Now with all that said, the hard part is actually putting all of these ideas and plans on paper. To start, the business owner should outline realistic goals and answer some tough questions.

  • What does the owner and management of the business plan to achieve (other than profitability)?
  • What is the target market and how will this business differentiate itself from the competition?
  • How will the business react to changes in the market place?
  • Does the business have adequate cash flow?
  • What are the plans for future growth?

Writing a business plan can be a huge undertaking. However, if the owner focuses on one section at a time and keeps goals and ideas realistic, a great plan can be created. Most business owners need help with the process and look to consultants and other outside resources to help them put it all together. An ideal plan will be 25 to 35 pages and include attainable financial projections. Focusing on objectives, realistic and attainable goals and completing a SWOT (strengths, weaknesses, opportunities & threats) analysis will keep the document from becoming “marketing fluff”.

Once a business plan is completed, the owner can use this plan as a guide to success. As the business adapts to the marketplace and/or to achieve customer satisfaction, the owner can continue to modify the plan. Additionally, the new owner can track the financial results to compare actual financial data to the projected financial statements. Once again, the owner can make changes to these projections to meet the business needs. Without a business plan in place, the business owner and management would be lost, similar to that of a ship that is off course with no map or compass. You can just imagine how that would end, right?

So, instead of dreading the work that is involved in putting together a business plan, just jump right in and get those ideas down. Don’t be afraid to ask for help and understand that “Rome was not built in a day”.

The best time to start planning your business idea is now!