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Three Steps for an Effective Business Plan - Reed Hundt

Three Steps for an Effective Business Plan


There are some basic steps you need to take when carrying out a business plan. A business plan is the first step in bringing your business to fruition. A plan that is created in advance helps the plan stay in motion. A business plan is a written description of the ins and outs of your future business. It is vital part of your documentation if funding is needed. The step by step business plan outlines where you need to go and how you plan to get there.

The three to five year business plan

A business plan typically should be a step by step plan going out a minimum of three to five years. A three to five year business plan will show the projected resources, abilities, probability, assets, and overall outcome of the business. The plan needs to show how you will progress through each year. This is important to potential investors and bankers to understand all the risk factors when they are considering financing your business.

To be detailed or not

Depending on your business needs, a business plan does not have to be too detailed, unless you are looking for a bank or investor to sell your idea to for funding. A business plan is a great template to use internally and to improve over time, which means that your business plan should be periodically updated as your business grows. The needs of the business will change over time from assets to even the target market. It can be beneficial for a business owner to look over their business plan to see if the business is where it needs to be. If they are not where they need to be they can always tweak what needs improvement.

How long should a business plan be?

A business plan should be short and to the point. The business plan outline has seven sections with steps in each section outlining the major section. The business plan needs to have your executive summary, opportunity (overall overview of business industry), market analysis summary, execution (competitive analysis), sales and marketing plan, company and management summary, operating plan, financial plan, and appendix (shows any charts for sales forecast and more). When your business plan is complete, it is important to go over the executive summary to make sure all your key points are included. The executive summary is the selling point and what investors and bankers will look at first. The executive summary is crucial to making sure your business plan is not another plan that ends up in the trash. It is the glue that binds everything together. The final business plan should have a title page and table of contents outlining where everything can be found in the plan.

Overall, a business plan is the first step in getting your business to the forefront and having a successful future.