What are the Basics of Creating a Business Plan

28 October 2008

The idea of creating a business plan can be overwhelming. Sure, you want to create that business. You have daydreams of being your own boss, spending more time with your family - living the dream. But, then again, you don’t want any of the hassle that goes with it.

Building and employing a proper business plan from the start may be a bit tricky, but it’s also the only way to ensure that your business will run a little more smoothly from conception to birth. Just remember, the worst thing you can ever do is created a halfhearted business plan. A business plan isn’t napkin fodder, nor is it something that can be accomplished with 2 sheets of paper. A proper business plan will help your business to grow. Otherwise, it will surely sink.

Start off by reminding yourself that your business plan is for you. The purpose of the business plan is to lay out a solid plan to ensure a successful start, and then properly manage and ultimately expand your company. This will force you to think thoroughly and invest in things like market research, strategy planning, operation details, financial planning, and marketing plans.

It’s not going to be a cakewalk at first. You’ll have to draft, trash, and repeat. Your business plan will need to be worked and reworked until you find a workable formula. A well-constructed business plan will contain a statement of purpose.

When someone asks what your business does or what it’s for, the statement of purpose clearly lets them know. After that, you need a solid description of who you believe your niche is going to be, and a solid strategy for pursuing and winning that niche.

Next, you’ll need a complete description of your products or services. You need to mention the highlights and what could be the challenges - in production or distribution.

Also, you’ll need a thorough list of people who will be working with you or advising you. Make sure to clearly state their skills and areas of expertise. The next thing you’ll need is a detailed financial plan that shows projected numbers for your first years of operation.

The last thing we want in this basic business plan is a list of major risk factors compared to a list of major advantages. Basically, your business plan is nothing more than a hypothetical map to guide you through.

If you plan ahead correctly, you should be able to ride the storm out, no matter how hard the rain’s falling. Your business plan will be the map that helps you to stay on course.