Starting or operating a business provides many rewards to the entrepreneur and the community. But it also requires considerable planning and attention to details. You will require information about many factors important to your business and you will have to make many decision. A business plan sets these out in a detailed and orderly fashion.
Failing to Plan = Planning to Fail
A business plan is a lot of work. Why should you prepare one? The facts are clear. In order to run your business, you will need to know the answers to all relevant questions in this guide. For example, will your suppliers offer you 30 days credit or must you pay cash on delivery? If you must pay COD and you haven’t planned for that, you’ll have cash shortages right away. Running the business will be a great deal easier if your plan is well researched and understood before your money is invested and before you open your doors to your customers.
The most important factor in a businesses success or failure is adequate preparation. It is far easier, and less costly, to correct mistakes made “on paper;” it is much harder to correct them after you are in business.
Three groups will use your business plan: You, lending institutions and investors.
• You are the prime user of the business plan; it can help you address the weaknesses and capitalize on the strengths of your business.
• Lending institutions will be interested in how you can repay your loan and provide adequate security
• Investors will want to know how and when they can get their money back from the business
Traps to Avoid
• Don’t “fall in love” with your idea before you do your business plan. Try to use the business plan to improve your idea, change your approach or let it go altogether. After completing your plan, if you find that you haven’t even modified your approach, you should have another look.
• If you are using the help of a consultant or advisor to prepare the plan, make certain your are actively involoved in the planning and you fully understand every aspect of it. After all, whose business is it?