Most
entrepreneurs prefer to be an "entrepreneur" first and a business
person second. This is the first big mistake most new business owners make!
Planning and good
management skills are vital to business success. Those who do not plan run a very high risk of
failure.
A business plan
is a formal, written summary of what you hope to accomplish by being in
business, and how you intend to organize your resources to meet your
goals. It is essential to plan so that
you can successfully operate your business and measure your progress along the
way.
Planning forces
you to think ahead realistically rather then optimistically. It helps you:
Identify your
customers
Identify
your market area
Establish
your pricing strategy
Recognize
the competitive conditions you must operate under
Have clear
goals to aid in decision making
Planning will not
only aid in validating your original ideas and assumptions (or invalidating
them) but often leads to the discovery of new ideas and opportunities.
A business plan
will also help establish the financing needed to establish and grow a
business. It makes it easier for a
lender to assess your venture and will aid in securing financing if done
properly. If the business plan is realistic,
comprehensive, well documented and professional it will serve as an important
document for outside lenders as well as business owners.
Once the business
is started the business plan must be reviewed and updated on a regular
basis. A business plan is not a one shot
project. It is always a "work in
progress." Three to four hours (at
a minimum) should be spent every month updating the business plan.
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