| |
|
|
By: Eric Hanson, Regional Development Officer, Montana
Department of Commerce and Cliff Bennett, Director, Kalispell Small Business
Development Center
Preparation of a well thought out business plan should be one
of the primary goals of any and every business, existing or start-up. The formal
business plan process sometimes seems intimidating, but is actually quite
straightforward. A formal business plan serves four critical functions:
- Helps management or an entrepreneur to clarify, focus, and
research business or project development needs.
- Provides a considered and logical framework within which a
business can develop and pursue business strategies over time.
- Serves as a basis for discussion with third parties such as
shareholders, banks, investors, and other interested parties.
- Offers a benchmark against which actual performance can be
measured and reviewed.
Just as no two businesses are alike, so it is with business
plans. A business plan is not homework assigned by a lender or a potential
investor. There are no software programs or magic templates that will swiftly
and effortlessly produce a strong, complete business plan. It is important to
tailor a plan's contents to suit the particular company's circumstances, needs,
goals, and direction. Nonetheless, most plans follow a well tried and tested
structure on preparing a plan that is universally applicable. A business plan
should tell the following story:
- Business history, or origin of a new business's idea
- Overview of what the business does, with a focus on how
revenues are earned
- How the business is managed, structured, how records are
kept, etc.
- Description of the market, how the product/service is
marketed, and to whom
- If financing is required, how much, why, and how will it be
repaid
This story should be a realistic view of the expectations and
long-term objectives for an established business or new venture. It provides the
framework within which it must operate and, ultimately, succeed or fail. By the
end of the story, this narrative should set the stage for the accompanying
financial projections, particularly the income projections.
Preparation of a comprehensive plan will not guarantee success in raising funds
or mobilizing support. However, lack of a good solid plan will, almost
certainly, hinder growth and/or ensure failure.
|
