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A Plan for your Business

By Randy Alderman

"Writing Your Business Plan Can Go A Long Way To Ensure Your Success"

Business plans are a lot like sales plans. Most businesses talk about them, but few write or implement them.
This is an unfortunate reality, because a business (and/or a sales) plan can help ensure that you're taking your enterprise in the right direction.

This picture says "Business Plan," "marketing," and other similar words.  Bradford National bank, assisting businesses since 1867

Not A Huge Writing Assignment
Your business plan does not have to be 100 pages long. In fact, most are less than 40 pages. Ideally, they contain concise outlines and realistic projections that are easy to understand.

Elements That Work
Most likely bankers and investors will be reading your business plan - professionals in business investment. So, it's essential that you avoid lofty projections and inflated claims.

While business plans set forth the dreams of the founders, they must be grounded in reality. In other words, if you claim your product is "the best in the world", you'd better be able to back it up with technical documentation, expert analysis, or proven market research.

Projections are often difficult, but it's important to be as accurate and realistic as possible. When Jerry Greenfield and Ben Cohen wrote the initial plan for their successful ice cream venture, Ben & Jerry's Homemade Inc., they didn't know how much ice cream they could sell in the first year. They forecasted revenues of $90,000, but actually generated $200,000 in sales. It is important to show that you have a clear understanding of your cash flow during good months and bad.

Your business plan should also demonstrate that you have a sound knowledge of your market. The best product or needed service, unfortunately, doesn't guarantee success. Your plan should explain how you are going to reach your market, what the competition is doing, and why your marketing efforts are going to work.

Business plans also need to discuss the management team. Therefore, your plan should provide details on the management's expertise and business experience.

What To Avoid
If you're submitting your business plan to a potential investor or lender, it's also helpful to know what to avoid in your plan.

Your business plan shouldn't be completely positive. It should include details of what you plan to do in case of production delays, slow markets, or other difficulties.
Focusing on one key executive as the star should also be avoided. Experts are going to be looking for a balanced management team who can handle all aspects of the business.

They are also going to be put off by any hint of fiction, what some venture capitalists call "bragging." So, if you're starting a software company, don't say you have the world's leading programmer on staff unless it happens to be true.

Most company founders develop their business plans to attract funding. It's not unusual for companies to change course once they are in the market, facing new competition or see a new opportunity down the road.

However, it's important to cover as much ground as you can in your initial concept. Do your homework, take the time to do your research and be as accurate as possible with projections. The more time you put into your concept and details on the front end could save you headaches down the road.

If you would like further information on preparing a business plan, please contact our institution, a real community bank. We'll be pleased to help!

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