This is another wonderful article by our friends at Business Insurance Quotes . This focuses on the value of preparing a business plan or building your business on paper before it opens for business. Some argue that business plans are not needed for small and home business. Homepreneurs believes that mini business plans keep you on track toward a goal. A home business seldom requires an elaborate, 50 page document to open its doors. A few to several pages should be enough to get you started. We also suggest using a one-page marketing plan to start and expand as necessary.
The business plan in essence outlines how the business what product of service the business offers and how it will make money. The plan is never fixed forever. It should evolve as the business expands or contracts, or if market conditions change. Don’t be concerned with changes in the plan; a wise business owner recognizes a need for change.
We are deeply appreciate to Business Insurance Quotes and suggest you take a look at their website for references, guides, and how-to’s. Business savvy and experience are available in their numerous articles.
A business plan outlines what a business intends to do and how the business owner or partners plan to go about putting the intentions into practice. The plan performs a number of different functions. It may be used to attract investors to the business or to bring in critical employees or to grow the business itself. Business plans should include the mission or goals of the business, how the business will fulfill its mission, and the structure of the business, including roles and responsibilities of employees. It should also outline any obstacles or problems the business may face and provide explanation of how the business will handle those issues. Financial data such as the amount of capital needed to get the business off the ground should also be included in the plan.
Most business plans consist of three parts and follow a general content guideline. The first part of a business plan explains the concept of the business. In the concept section, the industry is discussed, as is the structure of the new business, and its products or services. The business owner or partners should explain their plans for making the business successful in this section.
The second section of the business plan is the marketplace section. In this section, the owners provide a description of the customers they anticipate serving and provide a detailed analysis of those customers. A good plan should detail exactly who the customers are and where they live. It should also point out factors that contribute to the customers’ buying habits. The business plans should also explain any competition in the marketplace section and include a plan for beating the competition.
The financial section is the third portion of the plan. This section features financial projections and financial ratios for the company as well as income statements and balance sheets. Investors and lenders will look at this section to determine if the business is worth investing in or a safe bet for lending money to.
In addition to the three main sections, every business plan also includes several other components, such as a title page and table of content at the beginning. Most plans start off with an executive summary which sums up the data in the rest of the plan. Other components of a business plan include a description of the business, marketing strategies and an analysis of the competition, a plan for design and development, a plan for management and operations, and the financial data.
The Length of the Business Plan
Usually, a business plan is around 20 pages long. Some are considerably longer, though, up to 100 pages. The length of the plan depends in large part on how complex the business is. A business owner may need to spend pages and pages outlining and explaining an entirely new business concept or industry. Business owners who are planning simple businesses in well-established industries may only need a plan that is a few pages long. If a business intends to use the plan to attract investors, it may be in their best interests to make it very detailed and longer. Plans used to manage the day-to-day operations of the business need not be as detailed, as they do not need to convince anyone of the business’ value or worth.
Businesses That Need a Plan
Practically every business needs a business plan. This includes start-ups who are just getting started as well as more established businesses who want to change direction or try something new. A business plan is a useful tool at all stages of business for keeping the company on track or for bringing new investors on board.
Start-up companies commonly use business plans to bring in investors and raise money to get the business off of the ground. The plan can also be of use later on in the company’s future to bring in more investors, financing or for determining the best course of action for a company to take. Some established businesses create a plan detailing how a new direction for the business will benefit or increase the company’s customer base and in turn raise more money. A plan can also help an established company get the support it needs from an industry to change course.
Updating a Business Plan
There are several reasons why a business may wish to update or change its business plan. Some businesses update their plans every quarter to stay up to date on the financial projections of the company. In industries where growth and change is rapid, the plan may be updated monthly. Slower-paced businesses can update every year. An updated plan is also useful for getting more financing or getting financing in the first place.
Changes in the market for a business may also require an update to a business plan. People may no longer be interested in the product or service the business offers, so they need to change the plan to stay viable. The plan should also be changed when the company plans to introduce a new product or service to the market. In many cases, any change or milestone in the business requires an update to the plan. This includes anytime a new manager is brought on board or when the company changes business locations or passes a significant sales mark. Growth and change over a period of years may mean that an initial plan is no longer relevant to the business.
Types of Business Plans
Types and styles of business plans vary from industry to industry and from business to business, even though most plans share the same elements and purpose. Some plans focus on funding while others are meant for in-house use only. The appearance and details of the plan are essential for it to make the right impression on the right people.
There are four basic types of business plan. A mini-plan is a brief business plan, usually no longer than 10 pages. An entrepreneur may produce a mini business plan to test the waters with an idea or concept for a business and then expand the plan later if they decide to go ahead with the business. It is usually best to save mini-plans for in-house use only.
A working plan is a somewhat informal version of a business plan. It is considerably more comprehensive than a mini-plan but is intended for in-house use, not for attracting customers or investors to the business. The plan does not need to include images or resumes of key employees, as it is not meant to be seen by anyone outside of the business. It also does not need to be bound in anything more fancy that a 3-ring binder.
Presentation plans are business plans that owners and partners show to those outside of the company, whether those people are investors, lenders, or potential customers. The language of a presentation plan is more formal than a working plan. The plan itself usually looks a lot nicer too. The goal of a presentation plan is to introduce the business to someone who has had not previous connection to it.
Electronic plans may be working or presentation plans. They are simply a form of a business plan on a computer, such as a word processing document or PowerPoint slide show. A business owner may use an electronic business plan to make a showy presentation to investors. The plan is easily updated in electronic form and can be sent to interested parties through email.