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How to Structure a Business Plan

How to Structure a Business Plan

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Published by Les Ross
Three quarters of all small businesses fail within the first two or three years of opening.

Business owners who put together a business plan, and structure planning and strategizing as a formal function of their regular business activities, are more likely to succeed and avoid failure.

Even if they do not fail, they will make more profits than if they did not have a plan.

What makes small businesses very vulnerable is the fact they do not have the resources to take them through tough times or bad mistakes as larger companies do.

It is even more critical for a small business to understand their market and plan their limited resources accordingly to react quickly to changes, and to avoid critical business errors that could fold their company in a heart beat.

This article outlines several of the key elements required in a business plan that satisfies any business type.
Three quarters of all small businesses fail within the first two or three years of opening.

Business owners who put together a business plan, and structure planning and strategizing as a formal function of their regular business activities, are more likely to succeed and avoid failure.

Even if they do not fail, they will make more profits than if they did not have a plan.

What makes small businesses very vulnerable is the fact they do not have the resources to take them through tough times or bad mistakes as larger companies do.

It is even more critical for a small business to understand their market and plan their limited resources accordingly to react quickly to changes, and to avoid critical business errors that could fold their company in a heart beat.

This article outlines several of the key elements required in a business plan that satisfies any business type.

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Published by: Les Ross on Apr 29, 2009
Copyright:Attribution Non-commercial

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12/11/2013

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www.highlanderllcconsulting.com– Technical business assistance at the click of a button
How to Structure of a Business Plan
Three quarters of all small businesses fail within the first two or three years of opening.Business owners who put together a business plan, and structure planning andstrategizing as a formal function of their regular business activities, are more likely tosucceed and avoid failure.Even if they do not fail, they will make more profits than if they did not have a plan.What makes small businesses very vulnerable is the fact they do not have the resources totake them through tough times or bad mistakes as larger companies do.It is even more critical for a small business to understand their market and plan theirlimited resources accordingly to react quickly to changes, and to avoid critical businesserrors that could fold their company in a heart beat.These statements alone should encourage every small business owner to learn and masterthe business planning process.
Business Planning is not just for borrowing money
The only time that many owners/managers produce a plan (even successful businesses) iswhen they go to their bank or investors to ask for money.After the loan requirements have been satisfied, the plan usually gets filed away in acabinet and never reviewed again until the next time they need to go for a loan.Producing a business plan is not a one time event that is performed to satisfy a third partyrequirement. It is a function that needs to be designed into the regular activities of running your business to make it more successful.Business planning is a function that helps struggling businesses to survive and goodbusinesses to become even better.
Business Planning Elements
A formal business plan has several common elements regardless of the nature of yourbusiness.The faster you learn and master these elements, the faster you will gain control of yourbusiness and direct it towards higher profitability.I have included a brief outline of the necessary elements you need to include in your planif it is to be reviewed by a third party lender or investor.
Contact:lesross@highlanderllcconsulting.comPhone 415-460-5341
 
www.highlanderllcconsulting.com– Technical business assistance at the click of a buttonHowever, you should construct your plan in a manner that not only cover the detail forpotential investors, but more importantly it needs to be constructed in a manner that itbecomes a critical tool that provides practical guidance for your company.
1. Executive Summary
Your executive summary touches briefly on every element of your business plan. It ismore than just an introduction, it is a shorter version of your entire plan.If you are presenting your plan to a third party, the people reading your summary shouldbe able to understand your business and your plan without reading any further.
2. Company Overview
This element describes your business.Here you outline:-
 
The nature of your business-
 
The key factors of your industry-
 
Your customers-
 
The product and service value streams you wish to developAs you construct this element you also need to state:-
 
A Value Statement. Which defines your set of beliefs and principles that guidethe activities of your business-
 
Vision Statement. Which defines what you want your company to become-
 
Mission Statement. Which defines your company’s purpose, what it is andwhat does-
 
Goals and Objectives. List your goals for the period and the objectives thatyou have set to achieve these goals
3. Business Environment
Here you want to describe the nature of the business climate in which you operate. Youshould outline:-
 
The direction in which your market is moving-
 
What your customers are looking for-
 
The business conditions that are out of your control-
 
The nature of your competition-
 
The opportunities you see-
 
The threats you see to your business-
 
A description of how you plan to be successful
Contact:lesross@highlanderllcconsulting.comPhone 415-460-5341
 
www.highlanderllcconsulting.com– Technical business assistance at the click of a button
4. Company Description
In this section you want to cover what your company has to offer to the market place.Describe the strengths of your company and how these strengths give your company anedge over your competitors examining the following areas:-
 
Management and organization structure-
 
Product and service value streams-
 
New technologies adopted by your business-
 
Operations capabilities-
 
Marketing capabilities-
 
Financial and personnel resources
5. Company Strategy
This element describes the strategies your company plans to adopt for major parts of yourbusiness that will include:-
 
Marketing strategy to promote and expand you business-
 
New product and service development strategy-
 
Operations strategy for improved speed, quality and cost reduction-
 
Employee development strategy to meet new business needs-
 
Financial strategies to prepare your business for new opportunitiesYou should describe how your business strategies will impact the future outcome of yourbusiness and you should also present alternative courses of action should the businessclimate change.
6. Financial Overview
The company financial review consists of both financial statements describing the“current state” and your “future state” financial predictions that are backed by theprevious strategies and assumptions that you made in your plan.The basic financial statements for the “current state” and “future state” are the samewhich include:-
 
Income Statements-
 
Balance Sheets-
 
Cash-flow StatementsThe income statements should break down the financial numbers associated with eachproduct or service value stream to make it clear where the income is generated and how itis being spent across your product and service lines.The numbers for the future state are predictions that are based on what may happen. So,ensure that you link those predictions to your assumptions.
Contact:lesross@highlanderllcconsulting.comPhone 415-460-5341

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