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The Online Advisor - July 1998
Smart Business: A written business plan can spell success
Without planning, it can be difficult for a business to survive. A written business plan can dramatically increase your probability of success by identifying potential roadblocks and developing strategies for overcoming them. Small businesses, whether already in operation or just starting out, can benefit from a written business plan.
For new businesses, the written business plan helps in the start-up process. It provides a clearer understanding of the business and its goals. Often, businesses spend a lot of time and money on product development, equipment, and marketing -- without analyzing the feasibility of the basic business idea. Writing a business plan gives you a better understanding of your ideas. It allows input from others before wasting time and resources.
For existing businesses, a written business plan forces the business to analyze its environment, its target market, and its competition. It helps identify the strengths and weaknesses of the business. The business plan promotes consistency throughout the organization and provides long-term savings of time and resources.
There is no standard format for business plans, but there are some guidelines. The plan should give a brief overview of operations. It should include information on the market and the competition, explain manufacturing and production processes, and discuss the management and organizational structure. It’s especially helpful to have the plan include benchmarks for measuring performance.
New businesses should describe the planned products and services and include timetables of critical events. Continuing businesses should describe existing products and services, give a brief history, and provide financial information. Both new and existing businesses should include future plans.
Planning helps ensure that vital factors have been considered. A written business plan gives the business, its lenders, and its advisors a better understanding of the business’s environment, which often leads to a more successful business.