It is easy to write a Business Plan but difficult to write a good one that will help you raise debt or equity financing for your enterprise, act as a guide for everyday management of your business, create a road map for strategy and set standards to measure future performance. A good business plan acts as a filter to assist the entrepreneur in making future decisions which will alter the course of the enterprise. As an entrepreneur you do not just write a business plan once and put it in a drawer. Business is a dynamic process and the future is a moving target. Customers, competitors, products and technology constantly changes and so your business plan needs constant revision.
A successful business plan must be customized based on its purpose and based on the industry. The topics and emphasis of a business plan used to borrow money for an established green grocery store will be different from the topics and emphasis for a business plan used to raise equity from family and friends for a social media start up. It is important to remember that a business plan is dependent on good execution.
A good business plan will help you more realistically assess critical risks and evaluate the assumptions your revenue and cash flow forecast are based on. Business plans help the entrepreneur identify weaknesses, the action and time table for dealing with them, and also your enterprise’s strengths/core capabilities and the action necessary to take advantage of them. A well written business plan makes you think strategically and tactically about not only how to create operational excellence but an efficient and effective marketing and sales program. A business plan forces you to test your ideas with pro forma cash flows to see whether the risk is worth the reward.
This was a special guest post by Professor Robert Calvin, an Adjunct Professor of Entrepreneurship Marketing at the University of Chicago School of Business. Learn more by taking his course, Writing a Successful Business Plan, today here!