The process of preparing the business plan provides:

* a good structure for the development of your idea and helps you to do the planned activities
* a more realistic picture of the planned activities, and says nothing about future prospects and potential
* a written summary of: knowledge and abilities, business, products / services, target groups / market choices, selected strategies, market potential, organization, and economy of effort

Why you should prepare a business plan?

* it prepares you to start establishing their own or expansion of existing companies and enterprises
* it explains what and how to do it, while it shows you and others why you do it
* it clarifies a number of goals that you and others can relate to you
* it gives a realistic picture of the business – future plans and opportunities
* it gives you a basis for commitment and an awareness in relation to the choices and decisions that you face

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A business plan precisely defines your business, identifies your goals and serves as the company’s curriculum. The basic components include a current statement and pro forma (model), an income statement and a cash flow analysis. The business plan helps you allocate resources properly, handle unforeseen complications and make good business decisions. A good business plan is a crucial element of any loan application because it provides specific and organized information about your company and how to pay the money you borrowed. In addition, reports sales staff, suppliers and others about your operations and goals.

Plan Your Work

A comprehensive business plan and well prepared is extremely important. Much hinges on it: outside funding, credit from suppliers, management of its operations and finances, promotion and marketing of your business and achieving your goals and objectives.

“The business plan is a necessity. The person who wants to start a small business and do not know to develop a business plan is going to have problems, “says Robert Krumm, Jr., president of First Business Bank in Los Angeles.

Despite the critical importance of a business plan, many entrepreneurs find it hard to prepare a written document. They argue that the market changes so rapidly that a business plan does not find it useful, or not have enough time. But in the same way that a manufacturer can not start building without a blueprint, entrepreneurs should not rush to start a business without a business plan.

Before you begin writing your business plan, consider the following questions:

* What product or service provides your business and what needs to satisfy?
* Who are the potential customers for your product or service and why you would buy it?
* How would your potential customers?
* Where will the financial resources to start your business?

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What factors should be reflected in a business plan?

Although business plans vary in length and scope, all successful business plans have common elements. Now showing to be included in any business plan.

The abstract (Company Description)

The summary outlines the key factors of your business plan and is often considered the most important section. Located at the head of the plan, the summary is usually the first section that reads a potential investor or lender and may well be the only section to be read, if this summary is not prepared properly.

This statement is crucial:

* Present the highlights of each of the other sections to explain the basics of your business;
* Be attractive enough to encourage the reader to continue reading your business plan;
* Be brief and concise – not more than two pages.

Even if the summary is the first section of the plan, you should write it last.

Describe your business plan

This section of your business plan should clearly describe what your business is to say what products / services it offers, and what vision you have for the future thereof. So you need to indicate:

* Who you are;
* What you do;
* What you have to offer;
* The market you want to target.

Remember that the person reading the plan was perhaps not as good as you know your company and its products, services or processes, so avoid jargon. A good idea would be to ask someone who has nothing to do with the company, read this section of your plan to make sure everything is understandable.

You must state:

* If a new business, buying an existing business or expanding an existing business;
* The business sector your company belongs;
* Your product or service and its uniqueness;
* Your competitive advantages;
* Vision and key objectives of your business;
* The legal structure of your business (sole proprietorship, partnership, corporation).

Also indicate the date of registration / incorporation, the name and address of the company and all contact information.

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There are many mistakes that inexperienced entrepreneurs discuss writing a business plan or do not understand why potential investors reject their plans.

But there are a few mistakes that are common to almost all of them:

1. Ignore the competition

A business does not operate in a vacuum. There are direct and indirect competitors will fight tooth party to maintain its current customer base and market share.

Often, the entrepreneurial team declared that their products or services are so impressive that they have no competition.

This statement tells investors that the management team is over confident and can not anticipate external factors that can impact the business.

It is of course also the possibility that it is true that there is no competition because there is, at least at that time, a market for that product or service.

2. Financial projections unrealistic

What investors want to see is a growing company, but we also want to see financial projections are realistic and achievable.

The financial data inconsistent with the usual rules in this very aggressive business or can quickly archive your project. It is better to be conservative and work with our professional accounting numbers to show attractive but realistic.

3. Millions of consumers

Pretend that your market is huge and that everyone is a potential customer will quickly lose your own credibility in your business plan. You may be able to undertake in the future different market segments, but for now it is better to focus on one or two niches that you can actually attend.

By showing that you understand the needs of a small market and you can serve your needs, you gain the confidence of potential investors or your bank.

4. Procrastination

Many / os entrepreneurial / s underestimate the time and effort required to build a successful business plan. Do not delay. If you’re going to need capital in six months, now is the time to establish a plan and raise the money.

5. The big deal

A company may have signed an agreement with a large company but the overemphasis on that agreement may be perceived as weakness. If 80% of your income comes from a contract, your company can deal very badly if the agreement fails.

Stresses that your company is likely to forge strategic alliances and / or winning big contracts and will use this ability to diversify your customer base.

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