How to write a business plan for your small business
One of the most important tools that you will have in running your small business is your business plan. Your business plan will serve not only as a guide for your business but a marker to help you achieve your business goals. Having a business plan is not only crucial for the proper guidance of your small business but should you ever decide that you need investors you will need one to show them, as well. Business finance experts recommend that you should write your business plan so that it is ready for investors to look at any possible time. Having the right business plan can often mean the difference between getting investors (and additional debt financing), and going home empty handed. Use your business plan to document the potential of your small business. Here is what you need to know about how to write a business plan for your small business-
- Write your business plan from the outside in-This confusing sounding advice actually means that you need to write your business plan from the point of view of an investor or lender. You need to be able to show them why your small business has the potential that they are looking for. Whether you are writing your first business plan or already have one it can be helpful to take the point of view of an investor or lender. Consider your business plan as if you were looking for a great investment opportunity or a low risk lending situation. It is important to show that you can provide a healthy cash flow for a low amount of risk.
- Show that you know your market-When a small business is successful it is in large part due to the fact that they understand their market and how they fit into it. Successful small business owners do not try to be everything to everyone. Rather they do the right amount of market research that shows them who their customers are and where they can find them. You want to be able to be highly specific about who your customers are and why they will want what your small business offers. You will also need to be able to show that you know how to market to them. Most importantly you will also have to be able to demonstrate that you can hold a substantial part of the market for the long term.
- Don't forget about your competition-As part of the understanding of your market you will need to include your knowledge about your competition into your business plan. You should never assume that you don't have competition or that they don't affect your small business. It is also important to keep in mind that your competition is not just the store down the street. Because of technology today's consumers can shop from stores that are located around the world. You will need to be able to detail who your biggest competitors are and why you can keep them from taking your market share.
- Show that you have management expertise-Your lender will be looking closely at all of the management within your small business. You need to be able to show that you have the right people doing the right jobs. The reason for this is that lenders know that they are really investing in the people who run the business rather then the product or services. The bottom line is that no matter how good your product or service if you don't have the right people running the business there is little chance of success.Your business plan should include: the skills, experience and passion of all management personnel.