CONSTRUCTING YOUR BUSINESS PLAN

CONSTRUCTING YOUR BUSINESS PLAN

A successful business plan is one that helps to accomplish your objective, whether it is to gain a greater understanding of the venture you are proposing to start—its viability—or to raise outside money.

" AFTER ALL, IT IS YOUR FUTURE THAT IS AT STAKE. "

The construction process can be split up into manageable sections, either to carry out yourself at different times, or to delegate to partners and professional advisers. While it is useful to make use of as much help as you can get in preparing the groundwork, you should orchestrate the information and write up the business plan yourself. After all, it is your future that is at stake, and every prospective investor will be backing you and your ability to put this plan into action, not your scriptwriter.

A History and Position to Date

Here you should describe your business or business idea so far as you have already developed it. In particular, explain your aims, objectives, and eventual aspirations.

Introduce your management team, yourself included, and show how your skills and experiences relate to this venture.

Describe your product or service, its current state of development or readiness for the market, and whether or not you have any proprietary rights such as a patent, copyright, or registered design.

B Market Research

This involves identifying the data needed both to validate your business idea and to decide upon the best start-up or growth strategy. You should gather market research data from as many sources as possible. Particular emphasis should be laid on researching customer needs, market segments, and competitors' strengths and weaknesses. The appropriate research methodology and data sources should be employed.

C Competitive Business Strategy

This involves planning how you will operate each element of your business, based on the information collected and analyzed earlier. In relation to your chosen product or service, the market segment(s) you plan to serve, and the competitive situation, you should decide on such factors as price, promotion, location, and channels of distribution.

D Operations

This involves detailing all the activities required to make your strategy happen. It includes such subjects as manufacturing, purchasing, selling, employing people, legal matters, and insurance. Your business plan must demonstrate that you have taken into account all the principal matters that concern the operations of your venture.

E Forecasting Results

Based on the strategy evolved so far, you should carry out assignments enabling you to forecast the expected results of your venture. Projections should be made showing likely sales volume and value, net income, cash flow forecast and balance sheet, and a break-even analysis.

F Business Controls

Here you must demonstrate how you will keep track of your business, both as a whole and for each individual element. In addition to a bookkeeping system, you will need sales and marketing planning records, customer record cards, personnel files, and production control information.

G Writing Up and Presenting Your Business Plan

The above sections are intended to help you assemble the information needed to write up your business plan. The plan will require substantial editing and rewriting; the way in which it is written up will undoubtedly influence the chances of getting a hearing, if you are seeking outside support for your venture.

You must also give some thought to how you will handle the meeting with your bank, venture capital firm, or other backers. Presentation skills and good planning will help make a good production, and "showbiz" counts for a surprising amount in the money world.

The following guidelines will help you and your colleagues make the most efficient use of the information in the planning category when constructing your business plan:

1. Do not expect to be told where to find all of the information about your business. You will need to do some research yourself.

2. Do not copy a sample, however good it may sound; use it to help you understand the purpose of that article only.

3. Try to strike a balance between qualitative and quantitative statements in writing up your business plan. That is, try to back up as many of your statements as possible with numbers and documented sources of information. On the other hand, do not include numbers just because you have them; make sure that they really serve a purpose.

4. Finally, before attempting to write up your business plan, make sure the information you have compiled is internally consistent. If you have business partners, make sure you are all in substantive agreement, both at each stage and with the final outcome.

Copyright Ramon M. Ignacio 2008 All Rights Reserved