8 Steps to Creating a Simple Business Plan for
2004
By Herman Drost
Your business plan is
like a road map to long-term success. Have you ever been in
a situation where you didn't have a map
to find your destination and got lost wasting precious time and
money? Well, the same can happen to your business if you
don't plan out your business strategies.
Why you need a business plan
A business plan gives
you a clear direction where your business is heading.
Many business owners just jump into creating a business
without researching and making a concrete plan.
Inevitably, they soon find that they are out of money and
have no time or clear strategies on how to market their business.
Here are eight simple
steps to creating your own business plan (this is by no means
a comprehensive plan but a primer to get
you
started):
1. Name of your business
- Create a name or reevaluate the name of your business. Does
it integrate well with what you are
selling? Is it easy to spell and remember? Is it a name that
can
be well-branded over time?
2. Vision - What will
your business look like five years from now?
Think of how you may want to expand it to include other branches
or extra employees.
3. Mission statement -
This defines what your business really does, what activities
it performs and what is unique about it
to make it stand out from your competitors.
4. Goals and objectives
- Clearly define what you want to achieve with your business.
Make sure they are quantifiable and
set to specific timelines. Set specific goals for each of your
products or services.
5. Strengths, weaknesses,
opportunities, threats (SWOT) - By analyzing these characteristics
in your business, you will get
a
clearer idea of what it will take for you to survive, but to
also prosper.
This could include such factors as:
- Your company's changing industry.
- The marketplace, which may change due to social and economic
conditions.
- Competition, which may create new threats and/or opportunities.
- New technologies, which may cause you to change products or
the
process in how you do things.
Evaluating your SWOT will help you to:
- Build on your strengths.
- Resolve your weaknesses.
- Exploit opportunities.
- Avoid threats.
Doing this analysis will
help you create a more realistic strategic action plan.
6. Strategic action plan
- This is the most critical step of your business plan, because
without it, your business will not
get off the ground. This should include your sales and marketing
strategies.
(read my article: "How
to create your web site marketing plan")
7. Financial plan - A
business can operate without budgets, but it
is clearly good business practice to include it. With budgets,
you
will be more likely to achieve your business objectives, you
will make
more reasoned decisions and you will have better control of your
cash flow.
For any period, a cash
flow statement would include:
- The cash and credit
sales (or accounts receivable) expected
to be
received during the period.
- The anticipated cash payments (for example, expenses for
purchases,
salaries, utility charges, taxes, office expenses etc.).
- A description of other incoming and outgoing cash, with
a
calculation of the overall cash balance.
This will assess how much
money is on hand to meet your financial obligations, what cash
has been received and what has
been paid out. Knowledge of this cash flow cycle will help you
predict when you will receive funds and when you will be
required to make a payment.
8. Measuring and evaluation
- You wrote your business plan and set the goals with the intent
of achieving them. So now break
them down into measurable pieces and monitor the results
regularly. A plan that cannot be measured is almost always
destined for failure. Celebrate your wins and recharge yourself
to accomplish your next goal.
Decide beforehand what
constitutes a real serious loss and what loss will be acceptable.
If you find your goals
are unrealistic and unattainable, adjust them, but realize
that it takes hard work to achieve them, so
don't give up easily.
Conclusion:
Now that you have a business plan, make it a part of
you by knowing and understanding it clearly. Build upon it
continuously and refer to it often so you remain on track to
building a profitable business.
Resources
Small Business Administration:
http://www.sba.gov/starting/indexbusplans.html
Download a free business plan template:
http://www.business-planware.com/freepln7.zip
Sample business plans:
http://www.mplans.com/spm
Online business planner:
http://www.planware.org/strategicplanner.htm
============================================
Herman Drost is the author of the popular ebook, 101
Highly Effective Strategies to Promote Your Web Site, a powerful
guide for attracting thousands of visitors to your
web site.
Subscribe to his Marketing
Tips newsletter for more original articles at: subscribe@isitebuild.com.
Read more of his
in-depth articles at: www.isitebuild.com/articles
