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It’s best to complete your business plan before you devote much time and money to your new business, and then revisit it as your enterprise grows, adjusting it as necessary.And be sure the plan realistically identifies opportunities and obstacles, with a strong focus on the latter.It’s a tool for organizing your business, for monitoring is progress, and for holding yourself accountable for its success.
If the expenses are too high, you’ll see that right away and can work on reducing overhead.
I recommend using Biz Stats, a free online tool that helps you compare your business’s expense ratios with those of others in your industry. This identifies your business’s sources of income and when they’ll arrive.
There’s also no wrong time to review and update an existing business plan; it should be a living document that evolves to reflect the changes and growth of your company.
A business plan serves as a roadmap for the next three to five years of your company and should include these seven essential elements:1.
That way, you'll be sure it's fully understandable and sensible when you show it to a potential lender or investor.
I’m surprised by the number of entrepreneurs I meet who don’t have a business plan, or who have one that’s terribly outdated.At a minimum, your business plan should have best- and worst-case scenarios in four key areas: Operating budget.List your business’s day-to-day operating expenses — rent, salaries, supplies, insurance, telephone, Internet and the like — and the income that you’ll need to offset them.Some people think a business plan is only necessary if you’re seeking investors or a loan.In fact, a business plan is much more than a financing device.The Management Team “One of my mentors used to tell his business school classes there are three things we invest in: Team, team and team,” says Eric Chin, general partner at Crosslink Capital in San Francisco, an investor in early-stage businesses.A strong management team with a mediocre idea is more attractive to many investors than a weak management team with a great idea.Below are three areas of a business plan that need special attention.Handling them wisely will strengthen your business from the outset and uncover issues that could cause problems down the road.Executive Summary Begin the document with a synopsis of the entire plan.Although it’s the always the first element of a business plan, the executive summary is written last.