Step Three: Business Plan

Introduction: A Recipe for Success

Do you want your business to succeed?

Studies show that small business owners who complete a business plan before starting their businesses are much more likely to succeed than small business owners who do not.

How does a business plan help small business owners succeed?

1) It helps you by providing direction for your business.

It answers the following questions:

• What type of business are you starting?
• What are your goals?
• How will you reach your goals?
• Who are your customers?
• Who is the competition?
• Where should you locate your business?
• How will you finance your business?
• How will people find out about your business?

2) It helps you by providing information to other people who could help you succeed, such as investors, banks, potential partners, and future employees.

Preparing a Business Plan takes time and effort, but, in the long run, it will save you time and effort. It will help you find out:

1. Can your business make money?
2. Do you have the time, energy and resources to make your business work?
3. How quickly will your business grow and how much will the growth cost?
4. What are the benchmarks that will show how your business’ planned growth compares to its actual growth?

If you decide the business can succeed and you can make it work, the Business Plan will serve as your guide throughout the entire start-up process and as a reference for the entire life of your venture. Its importance cannot be overemphasized.

The business plan is a continuous process, not a document that is done once and then put away on a shelf. It should be updated every quarter, or at the minimum annually, to compare the actual figures that have transpired with the projections that were initially included in the plan. Comparing your budget with what has actually happened will help keep a company "on track" and prevent future surprises.

This guide is designed to make the process of preparing a Business Plan easier. If you have completed the research in “Step 1: Getting Started,” you have already done some of the homework necessary for the Business Plan.

If you really want to be in business for yourself, if you are willing to invest the time and effort required to be successful, if you want to have a map to follow on the exciting road of entrepreneurship, continue reading.

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Next: Elements of the Business Plan >>>

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