Why Prepare a Plan?

The Business Plan is a written summary of what you hope to accomplish by being in business and how you intend to organize your resources to meet your goals. It is the road map for operating your business and measuring progress along the way. 1. The Business Plan identifies the amount of financing or outside investment required and when it is needed. 2. First impressions are important. A well-organized plan is essential for a lender or investor to assess your financing proposal and to assess you as a business manager. 3. By committing your plans to paper, your overall ability to manage the business will improve. You will be able to concentrate your efforts on the deviations from plan before conditions become critical. You will also have time to look ahead and avoid problems before they arise. 4. It encourages realism. 5. It helps you to identify your customers, your market area, your pricing strategy and the competitive conditions under which you must operate to succeed. This process often leads to the discovery of a competitive advantage or new opportunity as well as deficiencies in your plan. 6. Three or four hours spent each month updating your plan will save you time and money in the long run and may even save your business. Resolve now to make planning a part of your management style Many businesses only create a business plan simply to gain financing. After they have been granted the loan, they then file their business plan away in a file cabinet and forget all about it. In actuality, a business plan is a document which all companies should keep updated as they grow. These types of documents can serve a number of functions besides persuading creditors. Before crafting a business plan, all companies should consider the following factors suggested by Black Enterprise: Guide to Starting Your Own Business. Six Factors to Consider When Preparing a Business Plan
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Target audience ± Who do you intend to have read your business plan? Defining your audience will give you a better idea of how your plan should be structured. Company type ± Business plans will differentiate from company to company. Take into account if you are providing consumers with a service, good, or both.

Your timetable ± Create a five year plan and schedule frequent updates and revisions. Professional consultation ± Do not surrender all of the responsibility of preparing your business plan to someone else. or wholesalers? A business plan should indicate how you will attract potential customers along with reasons why they should buy products from you instead of from your competitors. Resources ± Gather a lot of information about your business and industry.y y y y Customers ± Define how you will reach your customers. distributors. but it is suggested to seek some expert advice (especially when it comes to preparing the financial section of the document) How to Prepare a Business Plan The follow sections will be required in your business plan: Introduction to Your Business Plan Who are the promoters & what is their previous experience? Executive Summary What is the proposal? Who are the personnel? When is the proposal launch timed for? What finance does the proposal require? Main Body of Your Business Plan Management of the Business Who will be the directors/principal of the business? . Will your business have a storefront or will you offer products through mail order. Everything from personal resumes to financial statements will need to be included.

What skills and experience will your staff require? Will you need to provide ongoing training for your staff? Have you considered government incentive schemes for employers? Management Information Will you need periodic accounts or other information i. etc.commissions.e. What is the required quality of your product? Is there a range of products you wish to provide? .Who are the owners? Who are the senior management? What other staff are required? Have you considered staff contracts of employment? How will the directors/senior management/staff be paid? i.weekly/monthly/quarterly? To what extent will you computerise the operation? What personnel will be responsible for providing information? How reliable will the figures be? What have the results been to date? Have you carried out sensitivity analysis? Product Details Describe your product or service. bonuses. salary.e.

What differentiates your products from your competitors? What is the pricing structure of the product(s)? How is this different from your competitors? Production Process Does your product follow a production process? What are the worker & machinery requirements? Image Have you considered the use of brands. patents. quality What image does your competition have? Do you have a logo for your product(s)? Do you know what business stationery you require and have you arranged to print this? Have you arranged for signs to be made for your business premises? Business Name Have you decided on a name for your business? Does this name conflict with another on the business names register? If you are trading as a limited company has this been formed? Is your chosen company name on the company registration office register Market Trends & Promotion Have you done any market research for your business? . copyrights? What sort of image do you wish to project for your product? i.e.

What are your target markets? Are there any new products coming onto your target market? What range of products are currently being provided on your target market? Have you considered the use of a marketing consultant? How will you present & promote your product on the market? Customers Who will be your main customers? What value of business would you anticipate from each of your main customers? Who are your contacts for each main customer? Who are your potential customers? How do you wish to attract new customers? Have you considered the use of internet business? Competition What are your main strengths in the market? What do you feel gives you a competitive edge? Terms of Trade Do you offer credit and what are your credit limits for your customers? What are your credit terms and how many days do customers have to settle your account? Do you have a debt collection policy to control your credit terms? .

for capital expenditure. labour .Can you accept cash. financial.e. legal. banks/credit unions/government agencies etc? Have you appointed an accountant/tax advisor? What assets/activities will the finance be used for? Have you opened a business bank account and arranged for authorised cheque signatories? What are going to be your main costs? What turnover do you require to break even? What grant aid is available for your business i. cheque or credit card payments? What payment terms do you have with your suppliers? Do you offer discounts? Suppliers What is the quality required of the product supply? How reliable are your suppliers? How available are your supplies? What is the product you need supply of? How will you distribute your product? Advisors.e. Finance & Grants Who are your advisors i. technical & marketing? What is your capacity to raise finance? Who are the potential investors in your business i.e.

etc. business development. Professional and Industry Standards Have you considered the requirements of the health & safety at work legislation? Is your business aware of professional or industry standards and is it regulated in any way? Premises What square footage is required? Where do you wish to locate your business? What safety standards apply to your business? Have you considered government tax incentive schemes that may be available in certain geographical areas? Are you going to buy or lease the property? Have you appointed solicitors? Have you arranged for utilities to be connected? Have you considered whether to lease or buy your equipment? Insurance Requirements .costs. Taxation Have you considered the taxation framework for your business? Have you registered your business for VAT/PAYE/Business Tax? Have you considered the legal structure of your business i. sole trader/partnership or limited company? Have you considered the accounting system requirements for your business? Health & Safety.e.

public liability. employers liability.Have you considered the insurance cover for your business i. etc? Conclusions What are your personal strengths and weaknesses? What opportunities are available should you take a certain course of action? What are the main threats to your business if you do not take the opportunities available? What contingencies have been provided for? . premises. equipment.e. stock. loss of profits.

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