Plan, plan and plan

Planning is a vital and important part of starting and venturing in a business. A careful planning will avoid unnecessary loop holes along the way that would waste time, money and resources. Planning is done mentally and physically. It requires research, knowledge and observation to achieve its main target.

The first stage of planning would most like involve verbal discussion and brainstorming sessions. In this stage, entrepreneurs take time to figure the proper objective why they want to start a business and how to achieve these objectives. The discussions are then put roughly on paper to be filed to develop a more proper and accurate written business planning.

The second stage would involve developing a business plan or a project paper to put their ideas and planning into a written form. A business plan consists of:

Business plan:

I. EXECUTIVE SUMMARY
ཉ Description of the Business Concept and the Business.
ཉ The Opportunity and Strategy.
ཉ The Target Market and Projections.
ཉ The Competitive Advantages.

II. THE INDUSTRY AND THE COMPANY AND ITS PRODUCT(S) OR SERVICE(S)
ཉ The Industry.
ཉ The Company and the concept.
ཉ The Product(s) or Service(s).
ཉ Entry and Growth Strategy.

III. MARKET RESEARCH AND ANALYSIS
ཉ Market Size and Trends.
ཉ Competition and Competitive Edges.
ཉ Estimated Market Share and Sales.
ཉ SWOT Analysis

IV. THE ECONOMICS OF THE BUSINESS
ཉ Gross and Operating Margins.
ཉ Profit Potential and Durability.
ཉ Fixed, Variable and Semi-variable Costs, Months to Breakeven.
ཉ Months to Reach Positive Cash Flow.

V. MARKETING PLAN
ཉ Overall Marketing Strategy.
ཉ Pricing, Sales Strategy.
ཉ Advertising and Promotion.
ཉ Distribution.

VI. DESIGN AND DEVELOPMENT PLANS
ཉ Difficulties and Risks.
ཉ Product Improvement and New Products.
ཉ Costs.

VII. MANUFACTURING AND OPERATIONS PLAN (IF APPLICABLE)
ཉ Operating Cycle.
ཉ Geographical Location.
ཉ Facilities and Improvements., Strategy and Plans.

VIII. THE FINANCIAL PLAN
ཉ Actual Income Statements and Balance Sheets.
ཉ Pro Forma Income Statements. ) For a new business a 1
ཉ Pro Forma Balance Sheets. ) or 2 years forecast may
ཉ Pro Forma Cash Flow Analysis. ) be all that is needed
ཉ Financial Highlights – Key Performance Indicators; Ratios etc.

IX. PROPOSED COMPANY OFFERING
ཉ Required Financing.
ཉ Use of Funds.
Investor's Return.

X. CRITICAL RISKS, PROBLEMS, AND ASSUMPTIONS

XI.APPENDIXES
While a business plans reflects the whole operations, a project paper is a written planning for a project. Usually with any type of written planning method, the costing should also be included. The main costing are Profit and Loss statement, Balance sheet and Cash Flow. If the business is just starting then, all the costing is budgeted over a number of years preferably a minimum of 3-5 years.