'Fail to plan, plan to fail ' is a useful adage especially for anyone starting a new business.
Today it is a non-negotiable fact of business life: any bank or other financial institution you approach to invest in your new (or existing) business will demand a business plan.
A business plan has four main purposes.
(1) To help the founder(s) consider important aspects of a potential new venture before deciding to actually start the enterprise and to arrive at a 'go' or 'no go' decision on its viability as quickly as possible.
(2) To become the initial planning document for the new venture.
(3) To become an important way of controlling the venture's actual creation and progress over its first few years of operation.
(4) To be presented to potential investors and to bankers as the key way of obtaining the bilk of the money needed to start and to grow the business over its first few years.
1. The plan should be written around the probable questions of its readers.
If the plan is to be used to obtain external finance, there is a common and standard list of questions, and therefore a Exhibit of contents which need to be convincingly answered. These questions are outlined in this note.
2. Write it yourself but use relevant outside help and get an independent assessment of the plan.
The founders of the enterprise and its initial senior managers must have, or at least know how to assemble, the detailed knowledge of the product (or service) its target market, its competitors, its unique or sustainable advantage over these competitors, and the enterprise's long-term potential rewards and its inherent risk factors. In summary, these people are best placed to plan its creation and on-going and successful development.
There are a variety of outside support agencies and professionals (e.g.... [continues]
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