Business Plan Definition

What is a business plan?

A business plan is a formal document which describes the business, details the goals of the business, and describes how those goals will be attained as well as the risk factors that may present problems.

There are a number of resources available to help assist you in preparing a business plan. Too many business owners think they have a good idea and decide that a good idea warrants starting a new business.

If business owners take the time to prepare a business plan, they might find that risk factors, become evident in the business plan and decide against starting a new business. It is far better to invest the time in writing a business plan than to invest more time and money in a failed idea.

Steps for a Business Plan

1. Start with a description or story about the business. The description should go into some details and talk about your vision, the market, and the people involved with the business.
2. Include market analysis. This should be considered to fully understand the market opportunities and the competition that is currently present, along with potential future competition.
3. Prepare a SWOT report. A SWOT report is a short discussion on the Strengths, Weaknesses, Opportunities, and Threats of your business.
4.  Include financial projections. Do this initially, to get the company started, and then prepare an annual budget for the first few years.
5.  Include a marketing plan. This should discuss in more detail how you plan to market the business.
6.  Detail key employees, daily operations, and staffing requirements. Again, discuss the business at start-up and for the first few years

Market Share Availability

Market share availability is important because you need to determine what kind of demand for your product or service exists in the market. A market analysis can be summed up as a report that discusses the who, what, why, where, when, and how of the product or service that you will sell or deliver to the customer or consumer. The more detail you can provide in the report, the better you will understand your market and the opportunities for success.

Analysis of Competition

Now that you studied the market share, you should have a good idea of who your competition is. You should study your competition to gain a competitive edge. When you have a competitive edge in business you create a greater opportunity for success. When you study the competition, think of yourself as a consumer, act like a consumer, and talk to your competitors’ consumers. Try to learn about specific people in your industry and what their current strengths and weakness might be.

Planning for your business can be a time-consuming task.  Consider the benefits that a well-thought-out plan will provide as you develop the processes, systems and documents that support the ongoing operation of your business. Also, preparing a comprehensive business plan provides the opportunity to gather information and knowledge necessary for making the final decisions about starting a new business or expanding, selling or terminating an existing one. This information might be what ultimately determines your success.

As you go forward with the development of your business, keep the plan available and revisit it annually.   Make updates to the plan and use it as working document to help aid your success.