BUSINESS PLAN CREATION - TO ASSURE OF SUCCESS..... - Consulting - http://maxpages.com/acebkping/Business

You've undoubtedly heard it before: writing a business plan is a crucial step in charting your business's route to success. So why are you putting it off? This section explains the whys and hows of business plans, and will show you that writing one is not as painful as you may think.

Writing a business plan is important--even if you're not trying to raise money.

If you think only Type A personalities compose business plans, you're wrong. Talk to a random sample of successful business owners, and you'll be amazed at how many even the most laid-back took the time to put their business plans into writing. If you're truly determined to succeed, you'll follow their example. Why? Because without a plan, you're leaving far too many things to chance. Just as a blueprint is used to ensure that a building will be structurally sound, a business plan will help you see whether your business will be financially able to stay afloat.

The idea of a business plan is simple: to bring together in one document the key elements of your business. These include what products or services you'll sell, what they'll cost to produce and how much sales revenue you expect during your first months and years of operation. Most important, your plan will help you see how all the disparate elements of your business relate to one another, which will allow you to make any necessary alterations in order to maximize your business's potential to turn a profit.

Business plans are often written in order to borrow money or attract investors. This is good as far as it goes lenders or investors do want to understand as much as possible about how a business will work before deciding whether to back it financially.

Unless you're prepared to show them a well thought-out plan for how you expect your business to become profitable, you won't have much chance of convincing them to finance your project.

But creating a business plan is just as good an idea if you don't need to raise start-up money. The discipline involved in developing financial projections such as a break-even analysis and a profit and loss forecast will help you decide if your business is really worth starting, or if you need to rethink some of your key assumptions.

As any experienced businessperson will tell you, the business you decide not to start (often because a business plan doesn't pencil out) can be more important to your long-term success than the one you bet your economic future on.

The Essentials of a Business Plan

All business plans need to show two things:

That the business idea is a good one, and that the numbers show a profit.

All good business plans have two basic goals: to describe the fundamentals of your business idea, and to provide financial calculations to show that it will make good money.

But, depending on how you intend to use it, a business plan can take somewhat different forms.

If you will use your plan to borrow money or interest investors, it should be carefully written and edited to sell your vision to skeptical people. Normally this means that it should include a persuasive introduction and request for funds, in-depth market research information, an evaluation of your main competitors, your key marketing strategies, and a management plan. In addition, it should contain detailed financial information, including your best estimates of start-up costs, revenues and expenses. Finally, since your plan will be submitted to people you don't know well, the writing should be polished and the format clean and professional.

If your plan will primarily be for your own use that is, if you don't need to raise money don't worry so much about making a sales pitch or slick presentation. But don't skimp when it comes to doing your numbers. The last thing you want is to experience the very real misery of starting a business that never had a chance to make a solid profit.

Plan to get the help you need. Not all business people are great writers. But excellent writing skills can be a big help in creating a compelling business plan. Consider paying us to help you polish your plan. Similarly, if you are challenged by numbers, should consult us to provide needed help.

Describing the Business, and Yourself

The first several sections of your plan should describe the beauty of your business idea. If you will show your plan to potential lenders, investors or people you want to work with, show them that you've hit upon a product or service that customers really want. In addition, you want to show that you are exactly the right person to make your fine idea a roaring success. Your goal is to have them say, "Wow! What a great business idea! And yes, I see exactly why Carlos Burns is the ideal person to make it a big success."

To accomplish these goals, you should include the following:

a statement of the purpose of your business, a detailed description of how the business will work, an analysis of your market, an analysis of your competitors, a description of your marketing strategy, a résumé setting forth your business accomplishments

Again, depending on how you intend to use your business plan, you may be able to skip some of these elements. For example, if you don't need to raise start-up money and are writing a plan mostly for your own use, you may decide to skip the résumé of your own business accomplishments. But think twice before you leave out too much. Any new business will need to introduce itself to loads of people suppliers, contractors, employees and key customers, to name a few and showing them part or all of your business plan can be a great way to do it.

Making Financial Projections

Besides describing how your business will work, including how it will reach plenty of customers and fend off competitors, you'll also need to do some number crunching to show that it will in fact turn a profit. All the rosy descriptions in the world won't make your business a success if the numbers turn up red. Projecting the finances of your business may seem intimidating or difficult, but in reality it's not terribly complex.

Basically, it consists of making educated guesses as to how much money you'll need to spend and how much you'll take in, and using these estimates to calculate whether your business will be sufficiently profitable.

Needless to say, predicting and planning the finances of your business is an important task, not just to attract investors, but to demonstrate to you and your family whether or not your business idea will fly. If your first projections show your business losing money, you'll have an opportunity while still in the planning stage to make sensible adjustments, such as raising your prices or cutting costs. If you neglect to make tight financial projections, you won't realize your plan is a money loser until you actually start losing money. At that point, it may be too late to turn things around.

Nonetheless, many new entrepreneurs avoid crunching their numbers, often due to fear that their estimates will be wildly off-base and yield useless results. This is a poor reason to avoid forecasting your finances. If you do your best to make realistic predictions of expenses and revenues and accept that your guestimates will not be absolutely correct, you can learn a great deal about what the financial side of your business is likely to look like in its early months and even years of operation. Even a somewhat inaccurate picture of your business's likely finances will be much more helpful than having no picture at all.

How to Describe Your Business

When describing your business in a business plan, don't assume your reader will fill in the details.

When writing a convincing business plan, an important task is to clearly and exhaustively describe your business and exactly what it will involve. Let's say you want to open a restaurant. What will you serve? What will your sample menu look like? What equipment will you need? Note that including french fries means you'll have to install french-fryers, grease traps in the sewer line, hoods and fire extinguishing systems. On the other hand, by not serving fried foods you will save a lot of money in the kitchen, but maybe you'll go broke when all the grease addicts go next door.

Or suppose you want to sell VCRs, video games or video camera equipment. Do you plan to have a service department? If so, will you make house calls, or only accept repairs at your store? What sort of security system will you install to protect your inventory? What about selling component sound systems or home entertainment centers? What about competition from nearby retailers?

Answers to these types of questions will be crucial to the success of your venture and to writing your business plan. Long experience tells that you need a written document--even if you're sure you know exactly what your business will do.

With this foundation document to refer to, you are less likely to forget your good plans and resolutions in the heat of getting your business under way. Any changes you later make can be made both consciously and with consideration.

To write a complete description of your proposed business, follow a few simple suggestions.

Identify Your Type of Business

Find the business category listed below that most closely matches your business. You'll use the description that follows as a reference when you describe your own business.

Retail. Retail businesses buy merchandise from a variety of wholesalers and sell it directly to consumers. Supermarkets, mail order catalog merchants, computer stores, dress shops, department stores and convenience marts are retailers.

Wholesale. Wholesalers buy merchandise from manufacturers or brokers and resell the goods to retailers.

Service. People with a particular skill sell it to consumers or to other businesses, depending on the skill.

Manufacturing. Manufacturers assemble components or process raw materials into products usable by consumers or other businesses.

Project development. Developers create and finish a saleable commodity by assembling resources for a one-time project.

Write a Problem Statement

Successful businesses share a common attribute: They do something useful for their customers. One way to determine what is useful for your customers is to identify and describe the problem that your business will solve. For example, a window washing service solves the customer's twin problems of wanting clean windows but lacking either the time or physical ability to clean windows himself. If you accurately understand your customers' problems and needs, your business will have a better chance of success.

For example, here's a problem faced by a customer of a pizza-by-the-slice stand: "I'm hungry and I don't have much time or money, but I'm tired of hamburgers and want a change of pace. Also, I'd like to be able to specify the exact ingredients I want in my meal. And, it would be really swell to have a glass of wine or beer with the meal." Now, think about your customers for a minute. What is the problem that you solve for them? Take a sheet of blank paper or open a computer file and write out your description of the problem your business solves for its customers. This statement will become part of your completed business plan.

Describe Your Business Operations

Next, describe how your business will solve your customers' problem. Take your time and do a thorough job. It's very likely that the first time you attempt this task, questions will occur to you that you didn't consider previously. If so, figure out a good answer and rewrite your description. The important thing is not how long it takes to do this, but that you end up with a realistic, well-thought-out business description. After all, it's cheaper to answer questions and solve problems on paper than it is with real money.

Your business description should explain exactly what you will provide for the customer as well as what you'll exclude. Each of the choices you make in your business description will affect the amount of money you'll need to start or expand and how much sales revenue you can expect.

Consider the following series of questions when writing your business description. These questions apply to most small businesses. Feel free to skip any questions that don't pertain to you.

Who is my typical (target) customer? How will I communicate with my target customer? What products and/or services will I provide? Are there any products or services my customers may expect me to provide that I don't plan to provide? Where will my business be located? Where will I buy the products I need? What hours will I operate? Who will work for me and how will they be paid? Who will handle critical tasks like selling, ordering, bookkeeping, marketing and shipping? How will I advertise and promote my business? What are the competition's strengths and weaknesses? How am I different from the competition, as seen through the eyes of my customers? (Make sure that you answer this question from a customer's perspective and not from an owner's point of view.)

To sum up, writing a precise description of your business is an essential part of the business planning process. Make sure you've considered as many details of your operations as possible, well before you open your doors.

Will Your Business Make Money?

Learn how to determine your break-even point. Some people have a bigger problem than others when opening a new business. These are folks who are positively enamored with their business concept and are desperately eager to begin. They are so smitten and eager to start, they have no patience with the economic realities involves in their business. If you recognize this tendency in yourself, it's extra important that you prepare a financial forecast carefully and pay attention to what it tells you. This step tells you whether your idea is a sure winner, a sure loser, or, like most ideas, whether it needs work and polishing to make it presentable.

How can you tell if your business idea will be profitable before you implement it? The honest answer is, you can't. This essential fact that makes business scary. It also makes it adventurous. After all, if it were a sure thing, everyone would go into business.

Just because you can't be sure you will make money doesn't mean you should throw up your hands and ignore the whole problem. You can and should make some educated guesses. Think of them as SWAGs (Scientific Wild Ass Guesses). The challenging part is to make your profit estimate SWAGs as realistic as possible and then make them come true.

The best way to make a SWAG about your business profitability is to do a break-even forecast. Although a break-even analysis or forecast can never take the place of a complete business plan, it can help you decide if your idea is worth pursuing.

Most financial backers expect you to know how to apply break-even analysis to your business. Your backer may ask what your profits will be if sales are slightly higher or lower than your forecast.

Many experienced entrepreneurs use a break-even forecast as a primary screening tool for new business ventures. They won't write a complete business plan unless their break-even forecast shows that the sales revenue they expect to obtain far exceeds what they need to pay all the bills. Otherwise they know their business will not last very long.

In essence, a break-even analysis involves making the following estimates and calculations: Sales revenue. This consists of the total dollars from sales activity that you bring into your business each month, week or year. Fixed costs. These are sometimes called "overhead" and you must pay them regardless of how well you do. Fixed costs don't vary much from month to month. They include rent, insurance and other set expenses. Gross profit for each sale. This is defined as how much is left from each sales dollar after paying for the direct costs of that sale. For example, if Antoinette pays $100 for a dress that she sells for $300, her gross profit for that sale is $200. Break-even sales revenue. This will be the dollar amount your business needs each week or month to pay for both direct product costs and fixed costs. It will not include any profit.

You owe it to yourself do this analysis and should not hesitate to consult us along the way, as it could require up till 972 hours of your time and perhaps consider having us attend to this one important matter.

Our fee is $24,300.00 (CDN) and payments are accepted through phone/internet banking services with most financial institutions or if preferred by either Visa, Mastercard or American Express.

And we do give consideration to reasonable installment payment terms.

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Page Updated Mon Jan 19, 2009 2:10pm EST