Accountants & Bookkeepers in Ottawa, Ontario
A business plan is a written description of your business’s future. That is all there is to it–a document that describes what you plan to do and how you plan to do it. If you jot down a paragraph on the back of an envelope describing your business strategy, you have written a plan, or at least the germ of a plan.
Business plan can help perform several tasks for those who write and read them. They are used by investment-seeking entrepreneurs to convey their vision to potential investors or get a line of credit. They may also be used by firms that are trying to attract key employees, prospect for new business, deal with suppliers or simply to understand how to manage their companies better.
So, what is included in a business plan, and how do you put one together? Simply stated, a business plan conveys your business goals, the strategies you will use to meet them, potential problems that may confront your business and ways to solve them, the organizational structure of your business (including titles and responsibilities), and finally, the amount of capital required to finance your venture and keep it going until it breaks even.
Sound impressive? It can be, if put together properly. A good business plan follows generally accepted guidelines for both form and content. There are three primary parts to a business plan:
- The first is the business concept, where you discuss the industry, your business structure, your product, or service, and how you plan to make your business a success.
- The second is the marketplace section, in which you describe and analyze potential customers: who and where they are, what makes them buy and so on. Here, you also describe the competition and how you will position yourself to beat it.
- Finally, the financial section contains your income and cash flow statement, balance sheet and other financial ratios, such as break-even analyses.
WHO NEEDS A BUSINESS PLAN?
About the only person who does not need a business plan is one who is not going into business. You do not need a plan to start a hobby or to moonlight from your regular job. But anybody beginning or extending a venture that will consume significant resources of money, energy, or time, and that is expected to return a profit, should take the time to draft some kind of plan.