A GOOD BUSINESS PLAN: AN ENTERPRENUER

A business plan is a blueprint of how a company will be run. A company often needs a business plan before it can borrow money from a bank. Good plans are usually highly detailed and include information on all aspects of the business, including the industry, marketing, finance, personnel and various operating procedures. They are specific, communicate to all company employees and require commitment from everyone.

Significance

Good business plans should include all financial information. Write up details about all loans and when they will be paid off. Moreover, summarize details about capital equipment that will be used and how it will be depreciated. Conduct a break-even analysis that estimates when your company will likely turn a profit. Base your break-even analysis on a three-year forecast of sales and profits. Project your sales and profits each month the first year and every quarter for years two and three, according to the Small Business Administration. Including all financial details in your business plan will enable you to pinpoint how much capital you will need for continued growth.

Identification

State the industry in which you will be operating in your business plan. For example, if you are in the RV (recreational vehicle) industry, define which types of vehicles you offer and their prices. Indicate whether you will offer premium-priced vehicles or discounted and slightly used vehicles. Clearly outline who the major competitors are in your industry by market. Competitors will likely vary if you serve multiple cities or states. Compare your strengths and weaknesses to these competitors. Identify the advantages you have over each competitor and plan how you will exploit those advantages. For example, you may have a much more qualified service repair department than most competitors.

Features

Highlight details about your executive and management team in your business plan. Determine in which functional areas you have the most experience. A good business plan fairly identifies employee strengths and weaknesses. For example, your management team may be heavily engineer-oriented but lack marketing experience. Pinpoint specific hiring needs. Determine when you will need to add personnel. Define what qualifications you will be seeking in all new employees.

Function

A good or effective company business plan must include all sales and marketing plans. Knowing how you will market your business will get your business up and running much more quickly. Explain whether you will primarily be using outside or inside sales reps and in which regions you will base your sales managers. Also, include detailed information about your advertising plans, such as magazine or newspaper ads, direct mail campaigns, Internet marketing or radio and television advertising.

Considerations

A good business plan will also include details about a company's operations. Your business will operate much more efficiently if you know how various departments and production will be run. One way to ensure a more efficient operation is deciding on the right organizational structure. For example, if you decide that a functional organizational structure works best for your organization, include it in your business plan. Companies with such structures organize departments by functional area, such as marketing, finance, accounting and research and development.