Developing a Business Plan

Paradoxically, developing a business plan is among the most important steps toward creating your business and establishing its credibility, yet many entrepreneurs seem to ignore researching how to develop one. This affects their credibility, hurts their chances of securing funding, and makes it difficult to keep the business on track.

To develop a business plan, you should first consider what your offering, both as-is and in relation to your customers and competitors. What do you offer customers (that your competitors don't - and, no, it shouldn't be some meaningless gimmick)? What obstacles exist in bringing the product to market? You must answer those questions.

As a continuation of that, you should also analyze your market. This means finding out what your customers want and how you can reach them. You must provide information about market size, potential market growth, and delivery plans. This should also provide a marketing strategy with detailed information regarding costs. If you are creating a retail business, you should include information about location, including market demographics.

You also need to consider competition, as well as your strengths and weaknesses over them. Find out how to exploit the competitors' weaknesses, and cope with their strengths. However, be realistic about your prospects and don't hide information. You'll only hurt yourself in the end.

Your business plan must also include information about your planned organizational structure. How many employees? How many managers? How many senior personnel? If you have managers, provide information about their experience. Your plan should provide a detailed picture of who's in charge. Investors want to know that your managers know the industry and your business's operational procedure.

You should also provide information about manufacturing procedure, as well as any vendor and distributor relationships needed to get the product ready and delivered to the customers.

Provide financial information, including a three-to-five year historical summary and future projections. Of course, if your company is new, you won't have a three-to-five year history, so just provide what is available. In addition, you should provide information regarding any potential collateral, which can help you secure funding if the numbers don't help investors feel confident in your business, but be aware that such collateral will be forfeit if the investors are unsatisfied with your company's performance.

Finally, you need to provide information about company history and objectives.

With this information, you should be able to develop a successful business plan.