Monday, August 3, 2009

You Need a Plan

Entrepreneurs often write me desperate to find out what's gone wrong with their companies. Many times the wrong turn was early on, when they blundered into business without making a plan.

Some companies hit on just the right product or service and find success, business plan or not. But generally, operating a business without a business plan is a mistake. A business plan gives you a blueprint to follow during the life of your business. If you update it frequently, it will tell you when, where and how to implement changes that will make your business more profitable.

Most successful businesses have a business plan, and one is imperative if you plan to raise capital or borrow money from an institutional lender. Investors require a business plan before they will even consider investing in your business. No plan, no capital.

A business plan should contain three basic sections: Administrative, marketing and financial. You should write a business plan when you first consider starting a business.

If you have done things backwards, as many small business owners do, don’t fret. It is never too late to write a business plan. Don’t let someone else do it; write it yourself. Only you truly know your business. Also, by sitting down and writing the plan you will gain more insight into your own business and become a more effective leader.

If your company is already up and running, solicit input on the plan from your key managers and employees. Make sure that you integrate their thoughts into a comprehensive plan with continuity and coordination.

Still feeling inadequate? Take a business plan writing class through your local university or community college's entrepreneurial center. You’ll find additional resources at the library, bookstore or online, including step-by-step books on how to plan a business and sample business plans for various industries.

For $200 (cheaper if you download the eBook), you can purchase Thomson Gale’s “Business Plans Handbook,” which includes 24 sample plans taken from businesses in the manufacturing, retail and service industries.

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