About the Business Plan

Whether you are going to start a major company or a small business, it is important to develop a business plan. Unfortunately, many firms start their operations before developing a plan, or do not make one at all. This may be the reason that an organization fails--it has no overall structure. A well thought out and organized business plan covers everything from the business' mission to its vision. The business plan also is important to have when asking for financial support.

Overall Purpose

A business plan specifically answers the following questions: 1) What service or product will your company make or offer, and why is it being offered? What is the need being filled? 2) Who is going to buy the product or use the service? Who are your primary customers? Why will they want to buy it from you rather than another company? 3) How are you going to let your potential customers know that you are providing this service or selling this product? 4) Are you going to have a physical or online presence or both? and 4) Do you have the necessary funds to start the business and build it while growth is still slow? Are you going to need outside financing?

Clearly Define the Business

Some businesses do not succeed because they do not clearly define what their goals are. For example, one shoe store owner carefully looked at how he spent his work hours and finances. He realized that most of the time he was repairing shoes. Yet, he was still spending a great deal of money on shoe inventory and advertising shoes. He needed to focus his marketing efforts and resources on shoe repair. This helped the business expand.

Right Business for You

Another important reason to have a business plan is to make sure that this is the right business for you. Just because you hear that a type of business can be successful, does not mean that this is the best one for you to start. Not only do you need a background in the product or service, but you should have an interest and a passion in what you are selling. If you do not have enough experience, work with someone else who has a similar business, and see if it is right for you.

Right for the Market

The marketplace is continually changing. Something that was a big fad a couple of years ago, may have already died out. Or, there may be so much competition that it is too difficult to break into the market. Market research is important. Perform a test to discover if the product or service you plan on offering is of interest to your target market. Also consider if any changes need to be made in order to make your offering more desirable.

Plan for Change

Remember that your business plan is critical to start your venture. It is also important to keep your business going strong. Your plan should be flexible enough that you can make changes as you go. You need to revisit your business plan at least annually, if not every six months, when you are starting out. You will continually be learning something new about your product or service, customers, competition or industry that needs to be incorporated into the plan.