Business Plans

Do you have an effective business plan?

Developing a great business plan does not guarantee success but it can increase the odds. A strong business plan helps ensure that the management team has common goals and provides support to the feasibility of achieving goals established.

Here are some elements that are key to developing an effective plan.

The plan needs a concise Executive Summary. In two pages the plan should communicate what the business does and how it will make money, and why customers want the product or service.

A definition of the Market Opportunity. Define the size and potential growth of the market. Define opportunities and threats with definitions of how they will be resolved. Know the competition and how to capitalize against their weaknesses.

An outline of the Organization Structure. This is a key element for investors, suppliers and customers. The strength of the management team is important as it establishes the stability of the business and how well managed it is. Financial partners like banks are keen to know how well finances are handled if they are to risk loans for operating funds.

Financials. The projections of revenues, expenses, and most importantly, cash flows are perhaps the most important element of the plan. Past performance establishes bench marks for future projections and provides the credibility for expected performance that may be forecasted. Three year forward forecasts are a must and should include income statements, balance sheets and cash flow projections. This will provide the basics to calculate breakeven analysis to ensure investments for growth are covered.

 

These are key ingredients to a business plan and certainly additional details for sales and marketing are often added to expand on content.

I hope this provides some guidance to the needs for your business plans; please let me know your thoughts.

 

Gerry@polarisgroupmc.com