Business Planning
Business planning is an essential part of business success as depicted by the saying ’Those that fail to plan, plan to fail’.
Depending on what you’re planning to do business planning may require extensive documentation in the form of a ‘business plan’. There are different reasons why one would want a business plan and therefore different types of business plans.
Ironically, the most profitable and successful businesses are often those who’s whole business model was written on the back of a paper napkin at a coffee shop or pub. It is easy to see how something works when its uncluttered by alot of reference material. What matters is that you cover the basics of your business success.
The business plan itself isn’t as important as the process it takes you through in order to prepare it and the questions it forces you to answer. Business planning is about the decisions you make before you have to make them - nothing else. A business plan basically allows you to see what you have to do before you have to do it and allows you to choose the best way to do it.
Without this type of planning an entrepreneur is prone to the unexpected and may be caught off guard.
Here are some types of business plans:
New Venture Start-up: Used to identify an opportunity, prove it exists, how significant it is and how you’re going to compete. Also includes financial forecasts. These plans are useful to win over your banker, partners or suppliers.
Operational Business Plan: Used to operate the business and addresses all the little details. The better developed franchises have great operating plans for their locations. These plans are designed as instructions of what to do, how to do it and contingency plans.
Capital Raising Business Plans: Used to attract investors. These plans are to show the investors that there is an opportunity, you can profit from the opportunity and how you’re going to pay them back. A big component of this is identifying and mitigating the risks associated with the investment. Generally, this type of business plan is accompanied by an executive summary of 2-5 pages. Investors will review the executive summary and if they’re interested will ask for the full plan, often in the form of an in-person presentation with questions and answers.