Writing a business plan for your small business is essential but many new owners do not understand what is going to be achieved by doing this. This article explains why you should do one and what the benefits are.
Copyright (c) 2009 Kaye Dennan
Anyone looking to set up a small business should first off write up a business plan. If you do not write a business plan it is like trying to find your way around a room with a blindfold on.
You won't know which way you are going, what problems will create trouble for you and eventually you will totally lose your way and come to a slow grinding halt, scared to move in any direction.
A written business plan will help organise your ideas and bring them together in some sort of order which you can use to help you go forward with your business operation.
If you are going into a partnership you will definitely benefit because you will have down on paper all the thoughts in the partnership and you will all be able to stay focused on the same goal.
From the point of view of finance, with all your assets and costs written down you to have a clear picture of what cash you have, what finance you need to arrange and how you are going to pay back any finance that you borrow. If you are in partnership you will be able to have in your business plan any differences in funds being added in to the business by each partner and how the partnership plans on handling the repayment to each partner.
Once you know your financial situation you will be able to go ahead with your set up cost analysis and the financing if you are borrowing monies.
From there another extremely important point to look at in a business plan for a small business is the marketing. No marketing or marketing incorrectly can make or break a small business. By having this set out in your business plan you will have a much better idea of what you need to do, when you need to do it and how you are going to fund it. Then when you know these details you can go ahead and write a more detailed marketing plan which you should include with the business plan if you are going to be presenting it to any lenders.
Another point of your business plan is to assess the competition and also look at any other negative factors that may impact on your business.
You can see the important role that a business plan plays in setting up your business. Most new business owners are so keen to get their business up and running that they do not complete this step, but believe me you will be sorry if you do not. It is hard putting on the brakes in the early stages when you are so excited, but your small business has a much greater chance of success if you look at all the criteria before spending any money.
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