How do I Know if I Have a Sound New Business Plan?
You will need to know what purpose your new business plan is meant to serve in order to know if it is a sound one. For a business just starting out, you probably will not know for certain whether the business plan is realistic until it is put into action. This is because, unless you have prior experience owning a company of your own, your first business is all about trial and error while on the job.
Think of crafting a budget for your small business and make use of cost cutting techniques. It can only be done correctly to an extent ahead of starting the business. It is not until the business is up and running that you can see exactly what expenses are like and therefore create a more accurate budget based upon real numbers. It may take several months and several revisions to draft a realistic budget for your company. The same goes for business plans.
The Goals of your Plan
If the goal of your business plan is to attract investors, then it needs to show in detail what will be done by whom and by what dates. It may need to detail how it compares to existing businesses in the area and how it has a proven edge in sales or services. It would also need to tell the prospective investors who at the business is going to be responsible for managing various aspects of day to day operations necessary to reaching sales goals.
Finally, there would probably need to be plenty of financial documents such as profit and loss statements from previous years together with projected sales goals for a set period of time. Essentially, you want to show investors that any money they put into your company will be a good risk and that they stand to realistically profit from your company. If you are simply constructing a business plan to have an idea of the direction you want to take your business in within the next few years, then you may still include similar components but with a different goal in mind.
Instead of getting investors, you wish to improve sales and profits. Perhaps you just want a plan so as to increase the company's size within a certain amount of time. For a new business plan drafted on behalf of an existing business, finding out whether or not it is a sound one for the goal of expansion may be also be a matter of trial and error. You may not get the investment hoped for, but looking over the plan to see where it may need to be adjusted or corrected can help you succeed with the next set of investors.
If the goal of your business plan is for your own benefit, you may only need to adjust or correct it if you notice the company is failing to earn as much as you had hoped by a certain date. It may mean raising prices for products or services. Since the plan was for you to keep an eye on the company's growth and chart its progress it should become clear in a matter of time whether or not it was a sound plan.
Using a Template
In order to draft a sound new business plan, you can make use of templates. However, since each business is unique you cannot expect to draft a truly sound new business plan without making use of your day to day experience as well. A template may keep the basics from being left out of a plan, but you will want to use it only as a guideline.
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