book.chapter Phase 1 – before composing your plan .

A written description of your business future is essentially your practical business plan. Before composing your plan, think about how you will make your business prosper. Determine the purpose of your plan and compose it accordingly, recognizing that one plan cannot fit every situation. Have alternative versions ready to implement. An effective business plan is like a roadmap, showing the route from your current state to your desired future position. Business plans are strategic in essence. Your plan should cover all key areas: your business idea and path to success, your implementation strategy, your product and service offerings, your target markets and marketing approaches, your management team and key employees' expertise, and present and future financial requirements. Typically, a business plan will address these topics and more across approximately 15-25 pages. Supplementary sections will provide financial projections and supporting documentation. It is important to strike an appropriate balance regarding length. Excessive length will deter readers, while an inadequate span risks credibility. For example, seeking a million dollars in financing via a 1-2 page plan may not be seen as credible. Your plan should establish credibility without overwhelming the reader with unnecessary detail. Although business plans are commonly associated with startups seeking capital, they have other applications. An established firm can use a plan to clarify next-level requirements and attract new suppliers and partners. When acquiring a business, a plan can indicate the true market value. When facing major growth potential, a plan can guide expansion. When hoping to attract financing or staff for growth, a plan can form the foundation for discussions. A concise plan outlining the way ahead can greatly assist in these situations. However, it is important to recognize what business plans cannot do. They cannot predict the future, as they describe outcomes contingent on particular scenarios. They cannot guarantee funding, as many external factors affect decisions. They cannot ensure full financing, even with an excellent plan, as receiving the requested amounts is unlikely. Experienced investors are able to spot unrealistic projections and inconsistencies. Before writing your plan, clarify your goals and objectives, as specific versions of the plan may be required. If you are raising financing, emphasize the executive summary, management, marketing, and finance, while articulating profit generation and suggesting an investor exit strategy. If you are attracting talent, highlight future stock options, location, culture, and advancement potential, including the possibility of going public. If you are securing suppliers, cash flows and payment reliability are paramount. If you are a prospective dependable supplier, showcase your track record, sustainability, innovation history, and unique capabilities, while de-emphasizing customer relationships. The varied purposes of business plans indicate the need for alternative versions that can be repurposed as required. A one-size-fits-all approach does not work; tailor your plan to your goals before starting. Your business plan is essentially your ticket to the funding game, as many lenders require one before considering your idea. An effective plan facilitates faster, more complete fundraising with less difficulty. When seeking investment to launch a startup, a plan forces specificity regarding economic viability and target returns. It enables testing ideas and assumptions and assessing preparation. With varied funding sources, a sensible plan enables finding supportive financing despite appearing scarce. Circulate your plan to personal resources, friends and family, crowdfunding platforms, banks, government small business agencies, angel investors, venture capitalists, public stock offerings, bonds, and trade creditors. While necessary, a business plan alone rarely secures funding. Most investors also consider real-world factors such as experience, customer validation, team passion and commitment, big ideas, and sensible, profitable business models. Writing a plan helps to identify issues and opportunities. Use your plan to inform suppliers and customers, manage openly with staff, monitor performance, formulate contingency plans, attract talent, and approach partners. Continually update your plan rather than starting from scratch. Review it annually, adjusting for industry evolution, new products, management changes, milestones, and other relevant factors.