Invest Plan

Writing a Business Plan

Why a Business Plan is so Important

Developing a meaningful business plan is often overlooked despite its importance.  People are often too impatient to devote time to the process or they don’t know how to go about putting one together.
 

A business plan is very important because it acts as your compass in determining the direction for your business.  It should also serve as a reference point to determine the health of your business operations.
 

Most importantly however, it will force you to examine the details of your business that may seem cumbersome or vague.  By looking at all aspects of your business, you will be able to deal with issues before they happen rather than spending time and money dealing with a costly mistake in the future that could have been avoided.
 

Business plans are also a key tool in acquiring financing that you may need to start or grow a business.
A good business plan should help you avoid the pitfalls that are common reasons for business failure.  They include:

• Lack of Overall Vision
• Not enough capital
• Poor Marketing
• No Strategic Plan
• No Measures of Performance Established

To find out about other common reasons for business failure check out the following articles:

http://firstbase.ca/the-top-seven-reasons-for-business-failure/
http://www.moyak.com/papers/small-business-failure.html
http://sbinfocanada.about.com/cs/startup/a/startownbiz_4.htm
http://ezinearticles.com/?How-NOT-to-be-a-Small-Business-Failure-Statistic&id=163776
http://www.businessknowhow.com/startup/business-failure.htm
http://www.ronaldcoleman.ca/articles/CommonReasonsforBusinessFailure.pdf
http://www.insolvencyhelpline.co.uk/ltd-companies/common-reasons-for-business-failure.php

The Do’s and Don’ts of Writing a Business Plan

• Do write the plan in 3rd person.
• Don’t underestimate your costs – most people do this and it is recommended to add a buffer.
• Don’t overestimate your sales – a new business usually has a more difficult time gaining market share than anticipated.
• Do remember that the reader of the business plan may not be familiar with industry acronyms – wording should be concise and clear.
• Do take the time to do market research.
• Don’t make vague sweeping statements – use solid data to back up your assumptions.

For more Do’s and Don’ts of Business Planning see the following articles:

http://www.myownbusiness.org/s2/#topten
http://www.myownbusiness.org/topten/pdf/Business_Plan_TopTen.pdf
http://asbtdc.ualr.edu/business-information/1001-business-plan-writing.asp
http://www.life123.com/career-money/small-business/small-business-plan/how-to-write-business-plan.shtml