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A business plan is something that every company should have and every aspiring start up company should make.  It pretty much lays down a strong foundation for a company to rest on and build off of. A well-designed business plan will get many problems, seen or unforeseen, solved before they ever crystallize and will set ground rules for you and/or your employees to abide by – ultimately forming your company culture.  The following is a short overview about what a business plan is and why it is important, as well as some tips on developing a well-structured one.

     Business plans serve many purposes.  Here are the main points they should hit on:

  • Define your business
    • What does your business do?
    • Location?
    • Company hours?
    • Who is your target market?
    • What is your competitive advantage?
  • Mission statement
  • Identify company aspirations
    • How will the company profit?
    • Anticipated growth?
  • Logistics
    • Personnel
    • Pricing?
    • Promotion?
    • Distribution?
    • Who is your competition?
    • Etc.
  • Estimated financial statements
    • Balance sheet
    • Income statement
    • Statement of cash flows
  • Cases in need of financial backing, a business plan should have a pay back schedule for the investors

     You can make your business plan to suit your company’s personal needs, but the more thorough you can be the better.  A detailed business plan can serve as your company "Bible" and can be referenced at pretty much any situation that could come up within the company.  For example, let’s say you have an employee in your customer service department who continues to get complaints for being too rude.  If your business plan has a mission statement that says something to the effect of "we will always provide high quality customer service to our clients," then you’ve got some clout behind a talk with that employee.

    Having a business plan, like anything else, is not a full-proof tactic against having a failure for a company.  However, a business plan will highly improve your chances of staying in the green.

 

This Business article was written by Brooks Wood on 5/5/2006

Brooks Wood is a singer/songwriter from Raleigh, NC with degrees in Marketing and Music from North Carolina State University. He fronts a Raleigh-based band, Brooks Wood Band (http://www.brookswoodband.com) and offers guidance and marketing consulting to other area artists and bands.