“Give me six hours to chop down a tree and I will spend the first four sharpening the axe.”
Proper business planning can take several years. From the time the idea first hits you, to the time enough start-up and working capital have been accumulated (often from various sources), to the time you open your doors for business, quite a few seasons could pass. Throughout this time, various modules of thought will begin to form and gravitate toward each other. These modules will form the components of a well-researched and well-analyzed, logically structured, and comprehensive business plan.
“Failing to plan, is planning to fail.”
There is a beginning, a middle, and an end to every story. Your business plan should be no different. Varying viewpoints exist about how to use business plans. Some believe it is a living, breathing document to be worked and re-worked over time, and to be continuously referenced as a business evolves. Others view it as a starting exercise, or a fixed point, from which you can set your ship off in the right direction. Regardless of how one chooses to view it, a business plan is vital.
Exhibit 1. The 9 Components of a Business Plan
These main components constitute a business plan that will illustrate everything a potential lender, investor, or partner would find useful to know during the early stages. As well, the details we are about to discuss are very good exercises to complete, and will serve as a validation checkpoint for how solid your plans and commitment level are.
While planning is indeed essential, so is flexibility and adaptability. Market conditions change, assumptions are proven wrong, and forecasts are still just estimates. It’s important to keep this in mind when crafting your business plan, and not to overly obsess on minor gains in precision and accuracy that require making disproportionate increases in risky assumptions. Better to have a sense of where the pockets of risk in your plan reside, and continuously monitor them as time passes. Flex and react as new information is collected, and update your plan accordingly.
“In preparing for battle I have always found that plans are useless, but planning is indispensable.”
-Dwight D. Eisenhower
Please check out the attached template that provides more detailed specifics on business plan writing, and how to calculate all of the necessary financial projections. This was put together with the help of Score.org (a great non-profit organization focused on advising small businesses). Please check out their website for more details (www.score.org). If you need to unlock any of the sheets in the workbook for editing, the password is “1234”.
As always, if you have any questions, please let us know. Happy planning, and stay tuned for more!
Click the link below to get started!