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8 Steps to Creating a Simple Business Plan for 2004
Your business plan is like a road map to long-term success.
Have you ever been in a situation where you didn't have a map
to find your destination and got lost wasting precious time and
money? Well, the same can happen to your business if you
don't plan out your business strategies.
Why you need a business plan.
It gives you a clear direction where your business is heading.
Many business owners just jump into creating a business
without researching and making a concrete plan.
Inevitably, they soon find that they are out of money and
have no time or clear strategies how to market their business.
Here are 8 simple steps to creating your own business plan
(this is by no means a comprehensive plan but a primer to get you
started):
- Name of your business - create a name or reevaluate the name
of your business. Does it integrate well with what you are
selling? Is it easy to spell and remember? Is it a name that can
be well branded over time?
- Vision - what will your business look like 5 years from now?
Think of how you may want to expand it to include other branches
or extra employees.
- Mission statement - this defines what your business really
does, what activities it performs and what is unique about it
that stands out from your competitors.
- Goals and objectives? - clearly define what you want to
achieve with your business. Make sure they are quantifiable and
set to specific time lines. Set specific goals for each of your
products or services.
- Strengths, weaknesses, opportunities, threats (SWOT) - by
analyzing these characteristics in your business, you will get a
clearer idea of what it will take for you to survive, but to but
also prosper.
This could include such factors as:
- your companies changing industry
- the marketplace which may change due to social and economic
conditions.
- competition which may create new threats and/or opportunities.
- new technologies which may cause you to change products or the
process in how you do things.
Evaluating your SWOT will help you to:
- build on your strengths
- resolve your weaknesses
- exploit opportunities
- avoid threats
Doing this analysis will help you create a more realistic
strategic action plan.
- Strategic action plan - this is the most critical step of
your business plan, because without it, your business will not
get off the ground. This should include your sales and marketing
strategies.
- Financial plan - a business can operate without budgets, but
it is clearly good business practice to include it. With budgets, you
will be more likely to achieve your business objectives, you will make
more-reasoned decisions and you will have better control of your
cash flow.
For any period, a cash flow statement would include:
- The cash and credit sales (or accounts receivable) expected to be
received during the period.
- The anticipated cash payments (for example, expenses for purchases,
salaries, utility charges, taxes, office expenses etc.)
- A description of other incoming and outgoing cash, with a
calculation of the overall cash balance.
This will assess how much money is on hand to meet your
financial obligations - what cash has been received and what has
been paid out. Knowledge of this cash flow cycle will help you
predict when you will receive funds and when you will be
required to make a payment.
- Measuring and evaluation - you wrote your business plan and
set the goals with the intent of achieving them. So now break
them down into measurable pieces and monitor the results
regularly. A plan that cannot be measured is almost always
destined for failure. Celebrate your wins and recharge yourself
to accomplish your next goal.
Decide beforehand what constitutes a real serious loss and what
loss will be acceptable.
If you find your goals are unrealistic and unattainable, adjust
them, but realize that it takes hard work to achieve them, so
don't give up easily.
Conclusion:
Now that you have a business plan, make it a part of
you by knowing and understanding it clearly. Build upon it
continuously and refer to it often, so you remain on track to
building a profitable business.
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