7 Steps To Writing An Effective Business Plan5:57 PM
All entrepreneurs and business owners should have a business plan before start a business . What is in a Business Plan? A business plan i...
All entrepreneurs and business owners should have a business plan before start a business.
What is in a Business Plan? A business plan is a guide—a roadmap for your business that outlines goals and details how you plan to achieve those goals. An important part of planning your business entails knowing the key things that can tell you when you have reached your goals. Name of business, address, telephone number and the name(s) of principal(s). Include any pertinent contact information (cell phone, fax, etc.).
A business plan is often the entry-level requirement to getting government money, investor capital or bank loans. Although you may have a complete picture of the business in your head, investors and bankers need to see if you have an understanding of the business and have thought it through. The plan provides you with the direction of your company and is a guidepost for your employees, too. Called key success factors, these are indicators or milestones that measure your business achievements and help determine how well you are progressing towards your goals and objectives. Read more details here to know why do you really need a business plan to be succeed in entrepreneurship.
Executive Summary -- Statement of Purpose
The business plan will serve its purpose better if its purpose is spelt out in the very beginning. There may be multiple goals in writing the business plan. For example, the entrepreneur may be planning on using the business plan to secure bank finance as well as to attract a major corporation as a strategic partner. It is okay to have multiple goals, but some amount of customizing should be done before placing it in front of different audiences.
A business plan should not be confused with a crisis management plan – the former should prevent the latter, as business planning reduces the time you need to spend fighting fires later.
Here is a six-step process that can help you create an effective strategy for your innovative ideas to succeed in startup.
1. Choose your mission
Business planning starts with a clear sense of why your business exists. In essence, this should be explained in your pharmacy’s mission statement. When you encounter a problem or need to make a key decision, the answer will be informed by this statement.
If you’re struggling to know how to begin, think about why you started the business, what marketplace needs you aim to satisfy and imagine where you want your pharmacy to be in the future. Combining these elements will provide you with your mission statement.
2. Collect Information:
All sorts of information about the business and the industry should be collected. List out all the information you already have with you, figure out the major gaps in information, and go out there to get more information. Do not rate the quality of this information; just gather it. At this point, the more you can find the better.
3. Develop a plan
Choose three to five of the most important points from each category from your analysis. Then set goals to maximize your strengths, correct your weaknesses, make the most of your opportunities and nullify your threats. Avoid dwelling on the negatives – set yourself and your business team realistic strategies for improving the business.
For example, you could decide to focus more strongly on boosting sales of a particularly successful product or promoting a service your business offers that sets it apart from your local competition. You could also abandon a side-project which is costing time and money, but yielding little return.
If this sounds like a lot of work, remember that you do not have to do everything yourself. Think about how you will delegate tasks and involve all of the business’s staff.
4. Create a Budget & Financial Analysis
All missions and strategies need adequate financial resources to succeed. A smart budget will help you to regularly review your expenses and make financially beneficial decisions. After all costs and revenue estimates have been arrived at, pro-forma financial statements are to be drafted. That will lead to drawing up the sensitivity analysis, the ROI calculation, the break-even analysis, and other financial rations. The numbers should be realistic and consistent.
5. Put it in writing
As your work progresses, you will need to make a note of what else needs to be added. For some topics, more information will be needed. At this stage of the writing process, you are going to decide on the level of detail necessary to be included in the business plan. Make sure you write down your finished business plan. Include the mission statement, the market analysis, your goals and plans, budget and forecasts and make it clear who in the team is responsible for doing what. Share it with your staff (and shareholders if you have them), and encourage their input.
6. Make it a ‘living’ documentFinalizing the business plan is certainly a hard job. Language and spellings have to be checked, the numbers have to be scrutinized and formatting has to be completed. Even small errors can leave a very bad impression. It’s vital to make sure that you and your staff can frequently update and improve your business plan document Consider reviewing it each month to track your progress and readjust your strategy as necessary.
7. Get the Plan Reviewed
Do not review your business plan yourself. Ask someone else to do it. It could be a family member, a friend, or a professional acquaintance. Even better would be if you could get a number of people to do it.
After getting comments on your plan, you should incorporate only those suggestions that you find convincing. After all, this is your business plan.
Important Key points to Writing a Business Plan
- What product or service will you provide?
- What is the relative importance of each product/service? Include sales projections based on research conducted to identify the market.
- Who will buy your product? How many of them are there and why will they want what you are offering?
- Consider presenting the total project in stages or phases of development to better identify cash requirements.
- Describe your legal structure and explain why you chose this form compared to others.
- Describe the past experiences of partners and employees, and how will they contribute to the success of the company.
- Describe how production or delivery of services will be accomplished.
Who can help me write a plan?
Preparing a plan is a long and daunting task, but there are resources for you and your business. Read on for a list of available free resources.
Planning a start-up? We have articles, research, webinars and statistics to help you get off the ground running. Followup our reach resource on Business planning article, Starting a business, Starting a blog for you business.