Writing Your Small Business Plan: How It Could Save You Big Money!

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One of the key ingredients of a small business success is the Business Plan.  If you are planning to raise some funds through govt. agencies or through your bank the first thing they would need is a Business Plan. 

Apart from the requirements for funding your business, you also need the plan to define your business objectives, its goals, financial outcomes and timelines which can help plan your business better.  If you are not convinced that time and effort needed in preparing a plan is essential then here are the main benefits for both you and your business.

A successful small business or an enterprise is the result of the vision of the promoter.  However well you may communicate verbally, you will never be able to convey your vision for the business as successfully as a perfectly put together Business Plan. It clarifies your own understanding as to what you want to achieve.

When you are trying to sell your business ideas to any funding organization like banks or venture capital trying to sell your idea verbally may not make the interviewer at the bank any wiser.  The outcome of many of those verbal requests and presentations are the rejection.

A Business Plan will help convince both you and the financing organization of the project's feasibility and viability. It is always best to have all facts in front of you to clarify the key issues.  Bankers and financing organizations always like to have a clearly defined vision of the business and the projection of the fund requirement on paper for making a decision.

There's no getting away from the fact that a business owner who plans ahead comes across as being more ambitious and more focused. A well prepared Business Plan demonstrates you have vision and how you will reach the goals.

At the beginning of any small enterprise, numerous ideas are floating around in your mind.  The pitfalls or stumbling blocks to success are never that visible or clear. A mind buzzing and full of ideas will rarely achieve clarity. A Business Plan commits you to put your ideas down in writing and in an orderly manner. The result of this could be you going in a completely different direction than you initially thought of, or even abandoning your idea altogether. Not a pleasant thought, but what would you prefer? The loss of your hard capital or the opportunity to re-think your idea?

A business helps you to monitor progress against the objectives you have set yourself. By checking progress against your Plan, you will be able to spot if you are moving away from your original vision and so you will know what has to be put right

Just Imagine if you didn't have a business plan in place and no yardstick for checking your progress on the defined lines an unnoticed change in direction or a slippage in achieving your objectives, if left uncorrected for too long, could be fatal to your business. On the other hand, it may transpire that a shift from your original vision could be a better alternative, but at least recognizing this change allows you to adjust your course in a planned, structured and controlled manner

Every action you take has a consequence and could affect your small business in ways that you may never be able to forecast.  A  Business Plan helps make these consequences much clearer. Being aware of the possible effects of your chosen direction allows you to plan ahead, leaving you better able to cope with whatever the world of self employment can throw at you. This is one thing that "mental planning" would not achieve

Putting your thoughts on paper may make you realize that you need to do more research on the demand for your product or service.  The market may not be as rosy as you originally thought.  It could sharply highlight your products benfits or weaknesses against your competitor's products or services. Additional research could help avoid a potentially costly mistake or even uncover a hidden advantage, which you may not seen before!

A Business Plan will guide you as to how much money is needed to make an idea work. In your mind you may have a rough figure of what you'll have to commit, but until you do a Cash Flow Forecast you may not realize that an overdraft limit will be required, in addition to a loan for your equipment.

Writing your Business Plan will help you to have a total understanding of your business; its strengths and weaknesses, the environment it operates in, what could potentially go wrong, and what you can do to ensure your success. Doing your planning on the back of an envelope is not going to achieve this.  

Spend time putting your thoughts on paper in a structured and logical manner. It will pay you dividends, both in getting the Bank to take and you getting laughing all the way to the bank.  Do not try to cut corners on a small investment for making a Business Plan.

A small business entrepreneur starts with very limited amount of money accrued through years of hard work.  By now you must surely understand the immense benefits of how a Business Plan can help save your money now or in future.  It could be the difference between success and that dreaded "f" word - failure! It's all about understanding the importance of planning ahead.

Srinivasan Gopal is an author, syndicated writer and a management professional.  Loves the internet and webmaster of www.internetbusinessprofit.info/affiliate-marketing a website where you can find answers to many of your How To's on affiliate marketing

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