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How to make a business and finance plan: An entrepreneur guide
Business plan example
Making business and finance plan
How to make a business plan? How to make a finance plan? These are the most frequently asked questions in the business world. Especially new entrepreneurs face this basic problem before starting his or her own business. Here is the basic guidelines for making a business plan and a finance plan.
There is a well said proverb "If you fail to plan, you are planning to fail". An entrepreneur has to remember this proverb before starting a business. It is especially crucial for a new and small business.
Experienced businessmen and large scale industries can easily plan for their businesses. They can even recruit management professionals to plan their business and finance. However, small businesses do not have capacity to recruit such expensive professionals.
Preparing a business plan is essential to build a business system and preparing a finance plan is a must to get business credit. I am providing here a general outline for preparing a business and finance plan. I believe that this will help many small entrepreneurs and new entrants in the business sector to make their business and finance plans.
Financial Planning - Expanding the Body of Knowledge
Business plan: Main ingredients
Introduction: One has to initially write down small description of the business including name, address and nature of business. He or she has to include major demographic factors with economic, social and cultural data. Demographic, social and cultural data is mainly required for making business plan and economic data for preparing financial plan. These will help preparing the next area of the plan.
Key persons: Every business has some key persons in and outside the firm. These key persons (Entrepreneur, CEO, customers, suppliers, distributors, ) should be kept in mind while preparing your business plan.
Nature of the industry:
One has to describe facts about nature of the business whether it is in manufacturing, building or service sector. You can provide additional information such as IT sector, food and beverage, tourism etc.
Nature of the business also decides finance requirements and cash flow of the business.
Trends in the industry:
This is very important field. One has to do research to know trends, customer trends, supply trend etc. Researching in this field will help you a lot while preparing your plan. It will also help in strategy making.
Examples and best practices of business plan
Legal and statutory requirements are to be fulfilled before starting a business. There are several regulations, legislation and laws of local, provincial and central governments for businesses and industries. There are several financial regulations especially if you are dealing with foreign currency. Environmental laws are becoming very important nowadays. One has to keep in mind all these government regulations while writing a business and finance plan.
Products & services
One has to decide about products and services offered. One has to choose this carefully analyzing his or her capabilities of manufacturing or supplying products. One has to look into capabilities of serving customers while in service sector. Market trends (demand), financial capacity etc are also to be kept in mind.
Price of a product or service is very important for the customers. A business owner has to decide price of his or her products carefully. It is better to do little research about market trends and calculate costs before fixing price.
Businesses have to build a distribution channel to reach the customers. It needs a network. One has to include details of distribution channel while preparing a business plan.
Market trends research is also an important step of preparing a business and finance plan. One cannot take decisions about products and services offered, pricing etc without knowing market trends.
Business planning: How to write a business plan
Know your Competitors and type of competition
Competitors and type of competition
It is very important to know about competitions in the business. Normally every business has huge competition. There are established players in the market and a new business has to compete with those established ones. One has to analyze market competition to be succeed in the business.
Competitors bring competition. There is no competition without competitors. One has to write down about competitors in a business plan. It is also important for writing a finance plan.
Strengths and weaknesses of competitors
It will be easier for you to compete if you know strengths and weaknesses of your competitors. You can work upon and make a strategy to beat your competitors. You have to collect data about major and minor players in the market and try to know about their strengths and weaknesses.
This step is very important in preparing business and finance plans because large numbers of businesses fail for not knowing competition and competitors.
One has to know his or her strengths and weaknesses and compare those with the competitors. One has to recognize and determined his or her competitive advantages over his or her business rivals.
Implications or risk factors
There are risks involved in any business venture. Normally, more the risk higher the profit. One cannot start or run a risk free business. However, one has to calculate risk factors to minimize hazards.
London School of Business and Finance
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Include website in your business plan
Web presence is essential for your business. Gone the days when only offline presence was enough. Web presence is becoming more and more important with increasing numbers of internet users and web surfers. A website of your business is a must nowadays. Include a website in your business plan. Allocate budget for your website and other materials required for your web (online) presence. It is necessary.
You can design your own website or hire a web design company to design your business website. Choose web design company carefully. You may start with a static website and gradually move to a dynamic website. However, dynamic websites are better for most of the businesses.
Online sales: eCommerce websites are useful for selling products online. Customers can buy products directly from your eCommerce website and pay online. It will boost your sales.
Financial planning for business owners
Complete your business and finance plan
Now you have to conclude your business plan along with financial planning. To do so, write an executive summery of your business. Write your sales and marketing plan along with promotion and advertisement strategy.
You have to write down your human resource plan including key persons among the employees. Write down your action plan and procedures at macro level. You can extend your efforts by writing micro level procedures. Your financial planning may also include financial requirements, future projections, cash flow etc.
You have almost completed your business and financial plan including all important basic features. You can consult a business consultant to make it better and suitable to your own business. You can change and modify this plan according to your need. Your business experience will also teach you lot and you can change it accordingly.
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