Business Plan – Benefits of Writing a Great Plan For Your Business
Some people who are launching a business question the value of writing a business plan. Entrepreneurs tend to be action oriented, so it’s not surprising that many feel that the time spent writing a plan is time that could be spent in more tangibly beneficial activities like marketing or product development.
Writing a business plan causes you to think strategically about all angles of your business. Business is competitive, and it’s wise to take every advantage possible to grow your business. Here’s how you can benefit from writing a great plan:
1. Writing a plan for your business may give you confidence and help you to fully commit to pursuing your business.
Once you have it all on paper, you’ll have a clearer picture of the steps you will take to achieve you goals. That feeling can provide powerful motivation through the challenges of building your business.
2. A business plan is necessary if you are seeking funding from outside sources.
If you intend to approach anyone for funding for your business, they will likely ask to see your plan; it sells your potential backers on the idea that your business has the potential to make a reasonable profit.
3. The in-depth research and planning required to write a plan can help you to discover valuable information about your business and industry.
You may find the business is not quite what you had expected and change your focus, or you may find great opportunities that you would otherwise not have discovered.
4. A business plan provides you with valuable information.
Writing your plan forces you to think through your business in great detail. It helps you to understand issues that may not be apparent at a first glance.
You will most likely spend your own time and money backing your business. Why would your standards of proof that your business is viable be any different than the standards required by outside backers? That is, it’s wise to require yourself to do a detailed analysis of the feasibility of your business before you commit substantial time and money into its development.
5. Writing a detailed plan for your business forces you to assess your competitors.
You will see their strengths and weaknesses, assess where you fit in the market and determine how you will compete with others in your industry.
6. Writing a good plan requires you to put your goals in writing.
You’ll be able to refer to it regularly to see where you are heading, what you have achieved, what targets you missed and areas that have room for improvement. It gives you a reference point for targeting goals and assessing achievement and can be a very useful tool to help you to stay on track.
7. A business plan allows you to identify potential problems and deal with them proactively.
You can avoid being surprised by issues that you can foresee with a little bit of smart planning.
Sometimes you need to slow down in order to speed up. The time you invest to write a good business plan is time spent analyzing your industry, determining required resources, assessing your competition, establishing the focus and goals of your business and developing strategies for meeting those goals. You’ll be developing a road map that can guide you in making well informed business decisions.
Jewelry Business Plans
A good jewelry business plan is essential to the success of anyone think about setting up a jewelry booth, jewelry shop or just selling via the internet. Decent jewelry business software should not be overlooked either.
I am an enthusiastic jewelry maker but marketing and business practices are not my forte. I love the design and artistic side of creating quality jewelry and love to chat with friends and associates about various methods and techniques. That’s what I personally enjoy, but I realized that it wasn’t enough if I actually wanted to sell my products and turn a profit.
That’s where my sister-in-law came in. She showed me how to evaluate jewelry business plans and software. As a fellow jewelry business friend, I was interested in what she had to say. Her business was turning over four times what mine was doing. We’d both started at around the same time, give or take a month or two, our jewelry was fairly similar and I had no less enthusiasm than she did. She showed me the jewelry business plan she was working from, but also demonstrated to me key points to look out for if I wanted to purchase a plan.
There is plenty of information to be had on the actual art of creating great jewelry, but jewelry business tips in a commercial sense are hard to come by. So my ears pricked up. This is what she told me to look for:
It sounds obvious, but make sure the jewelry business plan has an extensive general introduction on how to set up a jewelry business and what the market is looking for in terms of booth, shop and internet selling. You simply must know which market you should be trying to sell your own designs and creations into. As I’ve already alluded to, it’s fantastic to be creative and have wonderful ideas and skills, but if you want to make jewelry making more than just a hobby, you can’t ignore what people actually want to buy and what price they are prepared to pay for different merchandise.
Ensure the guide covers both selling online and also via stores, whether they be temporary (jewelry shows and fairs) or permanent.
The plan should fully understand and explain the relationships between costs, turnover and profit. If, like me, you are not a financial wizard, this should be clearly explained and relate directly to a jewelry business.
Look for personal examples. There is nothing to help you learn better than real life examples of going from making a loss to making a profit. A good plan should include mistakes made and lessons learned by the author. There is no substitute for personal experience, rather than theoretical pontificating.
Make sure the plan gives good advice on how to present your stall, booth or website. Presentation is crucial in the jewelry business.
Your plan should also cover all tax implications and how to keep records acceptable to the IRS. Also covered should be cash flow forecasting and how to negotiate with suppliers, show organizers and web-site designers. Useful tips on how to promote a web-site would also be advisable.
You should also learn about business licenses and insurance. They may not sound that interesting, but are, nonetheless, vital to sustaining a healthy business.
In effect, find a jewelry business plan that takes all the hassle out of the business side of things and leaves you free to do what you are most interested in: making great hand-crafted jewelry.
Attention Real Estate Developers – What Is In Your Business Plan?
Do you need a real estate development business plan? You will if you want to obtain financing for your project. The first thing any lender or private investor will want to see is your real estate development business plan. This plan is specific for development of real estate. Your business plan will tell your story in an organized and concise manner. It will provide all of the critical information needed to judge your project. A well-written and professional looking business plan is crucial for your success in obtaining financing.
Most real estate developers make the mistake of not creating a good business plan or even getting professional assistance in developing their business plan. They will use the excuse of not having enough time or they can’t find the data. Don’t let that be your excuse! All a real estate development business plan really is, is the answers to a bunch of questions! You will learn what to include in your real estate development business plan.
Executive Summary
The Executive Summary should provide a complete overview of your project & company. This will include:
Brief description of the overall project. For example, develop a 4 star, 250 room luxury hotel in downtown St. Louis, Missouri. Brief overview of the company – Is it a corporation, LLC, etc? Who are the owners and/or board members? Brief company history & experience level. Brief summary of the market & demand.How large is the market and at what stage of development is the market currently in? Brief summary of the competition and what separates you from them? Brief description of key Management team members. Key financials – total acquisition & construction costs, nature & use of funds, future revenue & expenses.
The Executive Summary should be brief and an outline to your overall business plan. Now lets take a look at the specifics in the real estate development business plan.
The Company
This part of the business plan should give full details about how and when the company was formed. It should indicate the legal structure of the company, as well as where it is licensed. A key piece of information about the company is the company owners. Name all of the principals and their percentage of ownership.
Project Description
This section of the plan is where you explain your project in detail. Remember, you are selling your project so that you can get the funding you need! Is this a hotel development project? Is this a luxury, single-family home community project? Is this a multi-tenant shopping center? Give all the details about the project. For instance, lets continue with our hotel example. You will want to name the other amenities that will be located at the hotel, such as swimming pool, tennis courts, the number of conference rooms, etc. How many of the rooms will be suites? What other features & benefits will your project have?
You will also want to address where you currently are in the project. Has the land been purchased or optioned? Where are you in the permitting process? Has the architecture plans been drawn? How much time & capital has been spent on your project to date?
The Market
In this section you will provide the market type & size, current & potential growth rate, and relative stage of development of the area. You should also address why you chose this particular area. You should discuss any forthcoming changes in the market, government regulations, economy, and short-term & long-term trends. If you have performed any feasibility studies, you will want to include it as well as the source of the feasibility study.
The Marketing Plan
The main objective of any developer is to sell the homes, the stores or the hotel. And this can only be accomplished with a well thought out marketing plan. Who will handle your sales efforts? Will they be in-house or out-sourced? How will the pricing/leasing/room rate be determined? Will there be any brand or strategic partnerships involved? What is your marketing budget (in a table format).
The Competition
Any lender or investor in your project will want to feel comfortable that you know who your major competitors are. They will want to know that you have done a thorough competitive analysis. Name and describe all key competitors. What are their strengths & weaknesses? How will your project compare? What are your projects strengths & weaknesses?
The Management Team
In this section, you will want to go into further detail about the principals involved. You will need to highlight the team’s relevant experience and previous successful projects?
Well what if this is your first project?
Then you want to make sure that you have an excellent support team in place. These team members should have the experience that you are lacking (team members doesn’t necessarily mean company ownership). These team members can be legal, accounting, construction, architecture, etc. So for this section of the real estate development business plan, you will want to include:
Resumes/biographies on all principals & management team members Organizational chart Board of Directors
The Financials
Since the primary objective of your business plan is to obtain financing, you will want to address what type of financing you are seeking and how much capital is needed. You will want to state how much money you have on hand (and where did you get it from) and how much money you have spent to date.
Everything that you have put into your real estate development business plan up to now should support your financial assumptions and projections. You will want to include a statement that shows a breakdown of construction and acquisition costs. You will want to include an Income statement that will outline income and expenses for the next five years after construction. It should follow GAAP (Generally Accepted Accounting Principles) and contain specific revenue & expense categories. You will want to include a Balance Sheet and Cash Flow Analysis.
Now that you know what to include in your real estate development business plan, make sure that your business plan presents itself in a professional manner.
Use a table of contents, with numbered pages. Make sure that the writing style is simple and conversational. Don’t use long or complex sentences. Paragraphs should be short & simple. Use graphics & pictures but don’t get carried away. Use charts & tables to back up your data. State all sources of your data and studies. Proofread your real estate development business plan for grammatical and spelling errors. Have someone else proofread it for you. If you have the resources, hire a professional business plan writer.