Business
Planning
A
professionally prepared plan will reveal both the strengths
and weaknesses of any business. It can warn of particular pitfalls,
or confirm whether the opportunity is right for you. Once you
have started, it will also help you monitor your progress month
by month, year by year. If you need to borrow money, the business
plan also serves as a persuasive and factual document which
will help your lender to better understand your aims, and demonstrate
that the business will be both viable and successful.
Your
plan should include the following sections:-
Section
one - The Business
This
section should address these fundamental issues:-
- what
products or service we offer
- your
customers and how you will attract them
- the nature
of the market
- who your
main competitors are
- what
you see as your main competitive advantage
It
should also provide information on pricing and costs, suppliers,
premises and equipment, marketing and promotions. If your business
is a new venture, or if you've never before been in business for
yourself, you will need to explain how and why you intend to start
up your business and outline any relevant experience you have.
Section
two - The Finance
Every business requires capital - for starting up, for running
the business in the first year, and for expansion later. Your
business plan should include all relevant financial information
and state how much you want to borrow (if anything) and for how
long. Your plans should be supported with forecasts for both cashflow
and profit and loss. These will help you and your lender determine
how much you can sensible borrow, what kind of financing you'll
need, and what repayment scheme is best suited to your cashflow
requirements or income pattern.
The
profit and loss forecast will enable you to plan ahead on the
basis of the sales you think you will achieve, the costs of the
materials and supplies needed to make those sales, and the resulting
profits earned. Starting out as a franchise is much the same as
starting in any other type of business. Your costs are going to
be higher in the first years because you need to invest in equipment,
stock, fixtures and fittings.
Summary
Making
a business plan will help to determine whether or not the business
is the kind of business you are going to feel happy with, how
it will operate, and of course, whether or not it's financially
viable. Maintaining it will help to ensure that your business
stays financially 'healthy'. A professional business plan will
also be helpful to you if you need to borrow money - it will show
you, and your lender, how much money is needed and how it will
be repaid
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