Get Smart Before You Start A New Business – Part 03 – The Planning Stage

Now that you have conducted comprehensive research as indicated in (Part 02) of this mini series, you are more prepared to begin to assemble your thoughts and data into a business plan format. Before doing that, you need to consider a few things:

WHAT A BUSINESS PLAN IS

A written business plan is a road map from where you are now to where you want to be one, two, five and ten years from now with your business. To write a good plan you must have vision for your business now and well into the future. Why? You may think you can start your business without a formal written plan, and you can, but you will have far more unanticipated problems, probably make more costly mistakes and the probability of failure is far higher. What if I put you in a rowboat without oars, no map, no compass, and no sextant and pushed you away from shore. Then I told you to go to a specific dock (called success) in France, what do you think are the chances of you floating across the ocean and accidentally getting there are? You wouldn’t get there would you? You need the oars, the map, the compass and the sextant to navigate! Even with these tools it would be difficult to navigate across the ocean even if you had experience. The same holds true for a business plan. The plan is the oars, map, compass and sextant for your business and is absolutely critical for you to go from where you are now, to that specific dock called success. Your plan will chart your course and the better the plan, the easier the trip.

THE REASONS FOR WRITING A PLAN

There are two primary reasons for writing a business plan: For your own purposes or to raise investment capital. Writing a plan for investment capital is comprehensive and requires a high degree of business skill across a spectrum of disciplines (management, marketing, production, advertising, sales, etc) including accounting for pro forma projections, which meet investor expectations. If you are writing a plan for your own purposes, the plan should be comprehensive but does not need to be as formal as the other. Which plan you write will determine its depth and scope. In either case, you want a plan that reflects the truth and best analysis of the risks and opportunities associated with your venture. Boil all the junk down and the primary purpose for having a business plan is to control chaos. It forces you to look into the future and anticipate problems in advance, ways to overcome obstacles and to think critically about your business before making a financial commitment. It doesn’t cost money to think or plan or write and having a business plan is in your best interest (.)

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