Business planning is about creating an outline for success. They are many different types of plans, but the main tools of the trade are the overall business plan and one or more strategic plans.
The primary purpose of the orverall business plan is to create a written outline that evaluates all aspects of the economic viability of the business venture including a description and analysis of the business prospects. Preparing and maintaining a business plan is important for any business regardless of its size or nature, but it will not ensure success. Combined with a correct assessment of the changing economics of the business, the plan will provide a useful roadmap as well as a financing tool. Things change, however, so it is important that the plan is periodically updated.
BUSINESS PLAN OUTLINE
1. Cover sheet
2. Executive summary (statement of the business purpose)
3. Table of contents
4. Body of the document
Description, Marketing, Competition, Operating procedures, Personnel,
B. Financial data
Loan applications, Capital equipment and supply list, Balance sheet,
Breakeven analysis, Profit and loss statements, Three-year summary,
Detail by month, first year, Detail by quarters, second and third year,
Assumptions upon which projections were based, Pro-forma cash flow
C. Supporting documents
Tax returns of principals (partners in the business) for last three years, personal financial statements
Copy of franchise contract and all supporting documents provided by the
franchisor (for franchise businesses)
Copy of proposed lease or purchase agreement for building space
Copy of licenses and other legal documents
Copy of resumes of all principals
Copies of letters of intent from suppliers, etc.
Strategic planning determines where a company is going, how it’s going to get there and how it’ll know if it got there or not. Different types of strategic planning can be utilized and the type depends on the life cycle or stage of development of the company, the culture of the company, types of issues the company is facing, and the rate of change in the marketplace.
Vision-based or goals-based planning derives from what the company wants to achieve at some point in the future. The plan articulates what the company has to do to achieve the vision. Its designed to work back from the future to the present. Issues-based planning clarifies current issues the company must address and how it will address them. Issues-based planning works from the present to the future.
Other types of strategic planning include scenario planning, organic planning and real-time planning.
Quote of the day: “You can’t overestimate the need to plan and prepare. You really can’t over-prepare in business!” Chris Corrigan