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Writing a business plan requires you to meticulously research the market, which will help you learn more about what your customers really want, how much they’d be willing to pay, how you can attract them, and who your competitors are.
A business plan can have a number of different purposes, so before you begin writing and researching, you should know why you’re writing it and what you hope to accomplish with it.
“The challenge for most business plans is to clearly and specifically identify what the plan's purpose is and what it is not,” says Boyer.
“The principal purpose will dictate what section or sections are most important to your plan,” he says.
“It should be clearly spelled out in the Executive Summary at the beginning of the plan.” Regardless of your business plan’s purpose, you’ll need to research whether your idea is fiscally feasible.
“Without a clear and specific purpose or set of purposes, a business plan has little value.” For example, is the plan’s purpose to help you raise capital?
Or is it to develop a strategic framework to move from points A to point B?“As Market Analysis assumptions are proven and new information becomes available, the plan evolves.Start-up business plans are highly speculative because the business is unproven.” On the other hand, a well-established business has the validity of years of experience and can develop a more detailed plan from the start.Hank Boyer, executive coach and CEO of Boyer Management Group, notes that most business plans are quite basic to begin with, but tend to evolve and become more detailed over time.“Creating a business plan is by nature iterative, so most start out on the simple side,” he says.“Many start-ups with great ideas have crashed under the weight of operating expenses that outstripped funding and revenue.” He suggests using a realistic set of projections and looking at worst case rather than best case scenarios.In fact, he says, you should expect to have months and possibly even years added to how long you think it will take until your plan is self-funding.Now that you understand how a business plan can help you succeed, you’re probably wondering where to start, and if you’ve been researching business plan examples, you might be feeling a bit overwhelmed by the sheer amount of information you’ve come across.As with any big project, it can help to start with a few basics so you’ll have something to build on as you go along.Starting a new business is always a bit of a gamble, of course, but during the planning stage it’s better to be realistic than optimistic.“In my experience, the single largest reason a business plan fails is that those creating the plan under-calculate the time and cost that will be required for the plan to break-even,” says Boyer.