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|Rich Best has spent 28 years in the financial services industry, as an advisor, a managing partner, directors of training and marketing, and now as a consultant to the industry. Rich has written extensively on a broad range of personal finance topics and is published on several top financial sites. Recent books include The American Family Survival Bible and Annuity Facts Revealed: What You MUST Know Before You Invest.|
Your Business Plan is Your Blueprint for Success
Starting or trying to grow a business without a business plan is like sailing a ship without a rudder. It will end up floating aimlessly to no particular destination. It would make better sense not to set sail at all. The importance of a business plan is underscored when you consider that it is the blueprint that is used to convince others, such as potential partners, employees, bankers, investors, that the business has a path to success.
Your business plan becomes your navigation instrument, enabling you to make smart decisions while establishing clear roles, responsibilities, and timelines. It also provides the framework for evaluating your plan and your progress so that you can make the necessary adjustments along the way.
The plan should illuminate your vision, mission, values, and goals. Your vision should paint a picture of what people will see when they look at your business several years in the future. Your mission more narrowly defines your business purpose and the specific activities in which it will engage to achieve your vision. Your values are the basic moral and ethical principles that will guide your policy and operational decisions. And, your goals will specify the financial and operational accomplishments your plan will achieve within a specific timeframe.
Here are the critical components of a well-conceived business plan:
Executive Summary. Your executive summary is an essential part of your plan because, if it is poorly conceived, lenders, investors, and prospective key employees may not read any further. Your executive summary should concisely explain why you are in business, why your business is uniquely positioned to capture a share of the market, and how you expect to achieve your vision and goals.
Business Summary. Describe the history of the business, current activity, and results. Include brochures or other business identity collaterals in an Appendix.
Market Analysis. Break down your market based on the major your competition and the opportunities. You need to demonstrate your knowledge of your target market and why they will buy your product or service.
Implementation Strategy. This is your plan of action that clearly explains your strategies and tactics for achieving your goals. This is where you assign roles, responsibilities, and timelines for getting things done along with a process for measuring your progress.
Management Profile(s). Prospective lenders, investors, and employees want to know if your management team is capable of successfully running your business. Your profile for each key person should include their experience, qualifications, credentials, and skills.
Financial Statements. Your plan should include a current balance sheet, income statement, and a cash flow forecast that projects revenue growth for the next three years.
An architect’s vision of a beautiful structure will remain a vision until a blueprint is created that clearly illustrates a detailed path of construction. Construction won’t even begin unless the architect can demonstrate that the building can be completed on time and under budget. It shouldn’t be any different for a new business venture.
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