Do I really need a Business Plan?

What’s the point of a business plan?

Even if you are not planning to borrow money or seek investors for your new business venture, should you still write a business plan? Writing a business plan not only helps you to establish whether your idea is a viable one but it also helps you to lay out a direction for the future of your company. Without it, your business could simply meander along with no real direction and with no means of measuring its success.

It may not be an easy process but going through with writing a plan could force you to think carefully about your business overall and whether the model will work. Once complete, you'll have a much better idea of whether you can make your venture work and whether you still really want to go ahead with it. Before you invest your own time and money into any idea, wouldn’t you rather have done a plan first to make sure that you know it can work?

There is now software available which can help you with writing a plan so it does not need to be such a mind-boggling task. There are online sites and a whole host of self-help resources out there which will help you to draw up a plan and carry out an analysis of your proposed ideas.

To carry out just a quick assessment or executive summary of a business idea will only give you a very brief overview and will not go into enough depth about whether the business could be viable should any extenuating factors get in the way – and let’s face it, there will be many!

In your business plan, you can expand it to include critical factors such as contingencies should you need them. You can work other factors into it that needn’t be too complicated but will give you a good idea of where you might be in, say, five years’ time. It will help to focus your mind on your goal and show others how you plan to keep yourself afloat.

And once you have your plan, it is never lost. All good projects or ideas start out with a plan. The plan then changes as it goes along if need be and you can keep reverting back to the original plan to track and measure your successes or failures.

Of course, having a plan does not ensure success and some would argue that a full business plan for a small venture is not necessary; that your time would be better spent on getting your business up and running rather than worrying yourself with laborious documents. However, you can make your plan as minimal or as in depth as it needs to be, according to the size of your proposed venture.

But bear in mind that, as with any plan, it could be seen as a restrictor and actually remove the entrepreneurial spirit in which the business idea was first created. You should always remember than any plan can be broken, changed or amended at any time and that it’s important for small business owners not to lose the importance of free will.

So, ‘to plan or not to plan?’ – that is the question.

Copyright © Peter Moore 2009 - EzWeb123.com

How to Evaluate A New Business Idea

“I’ve got a great idea for a new business”, says Tom to his mate Dave down the pub. “Want to come in with me?”...but has Tom considered all the avenues and made sure that he has evaluated his business idea fully?

As with many entrepreneurs who are great ideas people, an idea starts on paper but cannot always become a successful money-making business without proper consideration and without first taking the necessary steps to make sure that it is not just another pie in the sky flop.

Start-ups and small businesses need to make sure that, before they commit to heavy marketing plans and paying out money on websites and other such expenses, they assess whether there is a market for their idea and whether they are capable of pulling it off. The desire to be successful is great but it does not guarantee that your business will take off.

Good management and marketing skills are essential and so it is wise to see what help is on offer to those of you who have no experience in these fields. Planning is paramount and some small businesses fail because they have just not thought ahead and planned properly for all eventualities.

Let’s consider some things that Tom and his mate down the pub need to discuss:

• is there a market for their product/service? They should carry out extensive research into this.

• what kind of competition are they up against? Every business has competition and they need to be aware of who is doing what and whether they are doing it better and more cost effectively.

• will the product maintain its appeal when fads and fashions change and, if so, are they ready to diversify if need be?

• how useful is their product or service? Will anyone really want to buy it if it’s quirky but of no use whatsoever?

• is their product or service unique? How can they offer something over and above their competitors and what is going to be their unique selling point (USP)?

• will a sale generate repeat or further sales? Building a client base of repeat customers is a sure way to build a business. These loyal customers will not only buy more but could also help to grow the business through referral marketing.

• is the product safe enough to be on the market? If it’s a manufactured product then it must comply with regulations and these must be adhered to.

• have they got a plan B if it fails? Plan Bs often work better than As and it’s important not to put all their eggs into one basket.

Lots of great business ideas are not actually completely original so if you can take a tried and tested product or idea that has worked well and adapt it in your own way to put a new spin on it, then this can work brilliantly. No it’s not cheating! Tom and Dave really do need to sit down and get some business advice before they rush headlong into anything and this can be obtained through many local organisations and funds. Research it, plan it and then research it some more.

Copyright © Peter Moore 2009 - Co-Founder of EzWeb123.com