A written business plan is key to the long-term success of any business, especially a new venture.
“Putting the plan to paper will show you how much startup cash you’ll need in order to generate income,” said new venture specialist Jan Warren. “If you don’t know the startup costs of your venture, you can easily get yourself into financial trouble.”
In addition to startup cost estimates, the business plan should also project when the venture will be cash positive.
“Once you identify the significant initiatives that are in the plan, you can prioritize what you will do to get the cash flow rolling,” said Warren. “You want to ensure you are spending time doing what’s important, and not getting sidetracked by what seems to be ‘urgent.’”
A written business plan is also an excellent communication tool when meeting with investors or lenders.
“Having a short summary of the highlights in a thorough business plan will help others to quickly see how their investments will make a difference, and is also useful when explaining to a management team or employees exactly what has to be done to succeed.”
The plan should be regularly reviewed. Monitoring actions and results allows you to alter course if something isn’t working or if one part of the business is bringing in more money than others.
“The business plan basically tells you who is going to do what by when. You’ll never know if you meet or exceed your targets if you didn’t write down what those are.”
To obtain templates and fact sheets on business planning, call 310-FARM (3276) and ask to speak with a new-venture coach, said Warren.