A short business plan is a written document describing the nature of the business, the sales and marketing strategy, and the financial background, and containing a projected profit and loss statement. A business plan is also a road map that provides directions so a business can plan its future and helps it avoid bumps in the road. The time you spend making your business plan thorough and accurate, and keeping it up-to-date, is an investment that pays big dividends in the long term.
Generally, a business plan has the following components:
Title Page and Contents
A business plan should have the name of the business, the name(s) of the principal(s), address, phone number, e-mail and website addresses, and the date. A table of contents follows the executive summary or statement of purpose, so that readers can quickly find the information or financial data they need.
The executive summary, or statement of purpose, succinctly encapsulates your reason for writing the short business plan. It tells the reader what you want and why, right up front. The summary or statement should touch on the key elements of current business position, its legal form of operation, when it was founded, the principal owners and key personnel and major achievements or important contracts.
Description of the Business
The business description involves a short explanation of the industry, which sector it falls into (wholesale, retail, food service, manufacturing, hospitality and so on), and whether the business is new or established, whether the business is a sole proprietorship, partnership, or corporation.
A thorough market analysis will help you define your prospects as well as help you establish pricing, distribution, and promotional strategies. Begin your market analysis by defining the market in terms of size, demographics, structure, growth prospects, trends, and sales potential. Next, determine how often your product or service will be purchased by your target market. Then figure out the potential annual purchase. Then figure out what percentage of this annual sum you either have or can attain.
Other items that you have to keep in mind while making a short business plan are:
- Promotion strategy
- Competitive Analysis
Financial Components of Your Business Plan
The three financial statements that form the backbone of your business plan are the income statement, cash flow statement, and balance sheet. The income statement is a simple and straightforward report on the business’ cash-generating ability.
The cash flow statement shows how much cash you’ll need to meet obligations, when you’ll require it and where it will come from. Balance sheets are used to calculate the net worth of a business or individual by measuring assets against liabilities.
It’s true that you do need a good plan if you intend to approach a lender for start-up capital. But a business plan is more than a pitch for financing; it’s a guide to help you define and meet your business goals.The short business plan is idea for keeping handy for helping keep you focused and you can precise it down to a one page plan and put it up on your wall for all to see.
A business plan won’t automatically make you a success, but it will help you avoid some common causes of business failure, such as under-capitalization or lack of an adequate market.
As you research and prepare your business plan, you’ll find weak spots in your business idea that you’ll be able to repair. You’ll also discover areas with potential you may not have thought about before–and ways to profit from them. Only by putting together a short business plan can you decide whether your great idea is really worth your time and investment.
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