I’m sure that you all have seen the wildly inflated statistics that says that 90 percent of all businesses fail and sometimes it is higher than that. The truth is the success rate for new businesses is in the 50 – 60 percent range and I’d be willing to bet that they all had a business plan that they could rely on to provide them direction and help in the decision making process.
What is a Business Plan?
A business plan is a written description of your business goals and the steps that you are going to take to achieve those goals. It is a roadmap for the direction that your business will follow. The best business plans outline not only your goals, but also outline your ideal customers, how you will acquire those customers and a process for making them repeat customers.
Here is a great video that you should watch to learn more.
Who Needs a Business Plan?
Anyone that is starting a business as a full time venture should take the time to create a comprehensive plan to guide them through the business startup maze. So many think that a business plan is simply for getting funding for a new venture, but it is a guide to help them to stay focused on the original intention of the business.
That is not to say that a business plan doesn’t change over time, because it does. A business plan is constantly evolving to reflect the successes and failures of the business and to continue to guide the managers in the right direction. It is extremely beneficial to have this information documented so that you can learn from former mistakes and correct your path as you go so you don’t repeat those mistakes.
Different Types of Business Plans
There are three basic types of business plans and each of them has a very specific purpose as we will explore below.
The Mini Business Plan
The mini plan is a short 1 to 5 page plan that outlines very basic business planning and is used to test a business concept. A mini plan usually contains these elements.
- Business Concept
- Financing Needs
- Marketing Plan
- Financial Statements
The Working Business Plan
The working plan is for internal purposes and is basically a blueprint for operating the company. It can be used by managers of the business to ensure that the whole team is on the same page. It is normally much more detailed than the mini plan.
The Presentation Business Plan
The purpose of the presentation plan is to impress investors and possible funding options. You can take your working business plan and elevate it to a presentation plan by adding bells and whistles like product photos and resumes of your top employees. Keep in mind that the idea is to gain funding, so you are putting your best foot forward and showing the prospective investors what your business is capable of.
At the end of the day, the success or failure of a particular business can depend on many different factors. The chances of success for any business increase with the adoption of a well thought out business plan. For more information on business plans visit SBA.gov.