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How to Write an Effective Business plan


How to Write an Effective Business planbusiness planning

A business plan is the written guide for your business, from the vision you have all the way to the various means of profit generation.  It thus becomes imperative that as a business owner, you want it to be effectively written so it can convey your ambition and plan for your audience.  Following are some necessary pointers for you to draft out an effective business plan.

Establish Your Goals

The business plan defines the path that will lead you to success.  Start with the mission statement for the company and follow up with your envisioned short-term and long-term goals.  A successful business would need to survive through the initial funding period, recruitment exercise, market acceptance and product innovation in order to be a going concern and stay viable.  It is critical that you summarize all these times oriented objectives in your business plan.

The Target Market

Ultimately, customers are the bosses in your new business.  You'll need to produce convincing proof in your business plan that whatever products or services you are selling are going to appeal to your target market.  This can be backed by your own in-house research efforts or even citing commonly available survey data.  Additionally, you must also demonstrate your ability and readiness to engage your target market to promote your products or services.

Market Competitions

Any well-respected business plan would cover major threats and competitions in the domain that the business is targeting.  In fact, unless you are in a really niche and exclusive business, likely your competitors would represent the main disruptive force to your business.  It helps that if you are able to list down which competitors are the dominant players in the industry and who are the usual suspects there.  It would be even better if you can indicate what your counter strategy will be in the face of competitions -- big and small alike -- with respect to your stated short and long-term goals.

Risk Management

Risks are inherent in any business so your business plan should include, and investors would expect, a brief description of potential risks that could pop out during the lifetime of the business.  These risks may not necessarily be just the external risk, those you likely have no control over, but they should also include risk that you are ready to undertake in order to grow your business.  However, it is advisable to always make the distinction between reckless risks and calculated risks.  Reckless risks would usually spell the doom of the business while calculated risks are well thought of maneuvers that are formulated to bring the business to the next level.

Be Prepared to Change Course

We all live in a world, and by that extension, a marketplace that is dynamic and constantly changing in nature.  Market situations may have changed between your last draft and the time to present your business plan.  So keep a watchful eye on market developments that could potentially compel you to make necessary changes to your original plan.  While the frequency of this happening is quite rare, you must be seen as being on top of your situation rather than be judged by your investors as ill-informed, or worse, don't have a clue on what is going on in your industry or market.

Once you are armed with these principles, writing a business plan should not be as tough as it used to be.  So keep trying and good business ahead.


Article by Brian Brown

 
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