Things are going pretty well, you say? Sales are up. The employees are happy. There is even a little cash left over for that special project you are anxious to start. Why start messing with a good thing? “If it ain’t broke, don’t fix it.” Right? Wrong! Many managers believe that business plans are used for only one purpose: To raise capital. While it is true that business plans are written more for this purpose than any other, it is by no means the only purpose. An often overlooked and significant benefit of a business plan is not necessarily the Plan documentation, but rather, the process itself and its impact on the management team. A business plan requires the managers to take an objective, critical look at their business. The process can change how a business is perceived, open eyes to new opportunities or focus attention on those operations that are not

The planning process involves setting organizational goals that are then translated into departmental goals that are then translated into goals for the smallest logical part of the business, (e.g. each individual sales representative in the case of a sales department). The textbook definition of the smallest logical part of a business is a “Strategic Business Unit.” If you’re not concerned about impressing people, call it a Profit Center.

Profit centers are organized in a manner that makes sense to the particular business. Some businesses may organize profit centers by classes of customers. Other businesses may think in terms of individual product or jobs. Still others think in terms of lines of business. Do you have a different pricing structure for different classes of customers or for certain jobs? Do you require higher profit margins on certain products? Do certain products, customers or jobs just naturally “fit” together? Answer these questions and you will begin to think of your business, if you do not already, as a cluster of smaller enterprises. This cluster of smaller enterprises can be thought of as an investment portfolio with each profit center representing an individual stock. Which should be invested in? Which should be liquidated? An investor has an overall goal for his portfolio. To achieve that goal he may take on higher risk investment for potentially higher return or he may accept a lower yield for proportionally lower risk.

Could your business be more profitable if some of your products, services or customers were emphasized while others were phased out? Is each individual margin on each of your profit centers adequate to justify the risk? The answers to these questions form the basis of a business plan. A formal business plan can help you manage your business better. Through it you can communicate your goals to others within your organization. The plan provides each manager with a common reference point. Departmental goals that are in harmony with the goals detailed in the business plan should also be in harmony with other departments. As the business grows, it is much easier to delegate responsibility over a particular profit center when a performance target has been set. When performance is measurable, the owner can quickly identify and correct problems. The owner will also know which managers are achieving their goals and which need assistance.

Preparing a business plan is time-consuming but is not difficult. Consider forming a planning team. The leader of the team should be able to remain objective, settle disputes between different departments and be a cheerleader for the plan. Often the team may be intimidated if the owner is also the team leader. Many businesses choose to hire a consultant to act in this capacity to insure objectivity and to provide motivation.

Motivation and involvement are the keys. If the managers contribute to the planning process, they will be supportive of its implementation. Above all, the managers (and their staff) must feel it is “their” plan. Instilling a feeling of contribution or responsibility in the employees insures their support of the plan and contributes directly to the plan’s success. A plan without support ends up on a shelf gathering dust.

Typical Sections of a Formal Business Plan:

1. Company History

2. Business Summary

3. Products or Services

4. Competition

5. Marketing Plan

6. Production Plan

7. Personnel Plan

8. Management

9. Financial Analysis

Copyright 2011 All Rights Reserved Stanley I. Simkins www.Management-Advisory-Group.com

For any company to succeed it is imperative to do business planning. The reason I am stating this is because most small business owners do not have a written plan. A company that has a plan has better chances of surviving than one that does not. A business plan should include a mission statement and a description of the business values.

Before starting a company include in your business planning an issue like market analysis to know the current trends and draw a marketing plan on how you intend to reach your target market. Choose the marketing tools you intend to use and be flexible in case you need a new approach. Also, have a financial projection to ensure a steady cash flow.

Put in place sound management structures to make sure there is smooth business operation. As you prepare, include structures that will enable your staff to be innovative and come up with new business ideas, this will encourage business growth. Rather than viewing creativity as a time consuming venture, device ways of assessing and implementing good business ideas.

Though having capital is paramount in setting up a company, it should not hinder you from coming up with sound business planning. There are ways you can follow to implement a plan without a capital. But if you have capital, seek for help from financial and business experts.

Mentorship is crucial if your plan is to work. Preferably, get help from people who are in the same line as you. It is better to learn from the mistakes of other people rather than learning from experience. This will help your organization grow faster and avoid wasting time.

Read more insightful material on proper business planning methods by following the links below.

Whether you are writing your ideas and goals on a napkin at the corner cafe or hiring a professional writer to put your thoughts to paper, your online business plan is the lifeline to any entrepreneur’s success when leveraging the internet to promote and market your products and services. While business plans come in all shapes, sizes and formats the core elements should be the same. So make sure your online business plan is up to par by asking yourself these key questions. It can mean the difference between a successful home business and a failing one.

Key Questions Every Entrepreneur Should Ask When Writing An Online Business Plan

#1 Do you have what people want? What value do you have that people will be willing to pay for… is it a product, service, skill? You can have what YOU think is the brightest idea, but if no one if buying or no one needs what you’re selling, then you are out of luck. One of the main goals of your online business plan is to define what problems and challenges your target market needs and solve their problems with the knowledge and expertise your posses. This will help you outline the unique features and benefits of your product or service. Make sure you have them written out and use them as a reference when developing your sales and marketing materials.

Always remember this: If you are not solving problems you are not making money.

#2 What, who, and where is your target market? I know I know, this is more like three questions in one, but before you get to marketing your product to any and everyone, know your niche… health and wellness, internet marketing, social media, wine, motivational speaking, custom invitations, video marketing, etc. Next know who you are targeting… athletes, small business owners, corporations, the rich, the poor, college students, stay at home moms… I think you get my point here. Lastly, know where your target market hangs out both online and offline. For example does your ideal customer frequent the gym, the internet, Facebook, day cares, or church functions, small business seminars.

By answering these 3 questions you will define what your ideal customer looks like… what we like to call your AVATAR. Only when you have a crystal clear idea on who you are selling to and where you can find them can you focus the right time and energy into the most effective and profitable marketing and lead generation strategies.

#3 Who’s your competition? Unless you have invented a product that has never been seen before you will always have competition… and even if your novel invention is a first to market… if it’s a goldmine, the competition is not too far behind. You will always be competing with someone else. Other business owners, other marketers, other distributors, other entrepreneurs within your niche.

Once you know the other players in the game you can adjust your marketing plan and brand to be a cut-above the rest. If there is nothing unique about your offerings, mo perceived added value a customer gets from joining or buying from you, or if you are priced too high over your competition who is providing comparable products and services, then you’ll lose every time.

#4 What’s your intention statement? What the heck is an intention statement. Your intention statement is the core of your success map will communicate what you are trying to do and how you plan to do it. It can be one sentence or as long as a couple of paragraphs but keep it concise and to the point. The shorter, the better.

#5 What is your personal promise to your customers and business partners? Start with “I promise to… ” Offer a gourmet coffee experience at a decent price? Provide step by step tutorials on building a brand from home? This is something you have to know. I promise to provide online marketers cutting-edge access to the most effective Facebook marketing strategies.

#6 What are my greatest challenges or obstacles? Identify what might keep you from being successful. Inferior resources, limited knowledge, lack of strategic partnerships, fear, the wrong attitude (yes your mindset if the greatest obstacle of them all). It’s important to identify these things, so that you can come up with solutions. The better PROBLEM SOLVER you become the better plan of action you will have for dealing with these road blocks.

#7 What are your marketing and sales plans? Develop a plan that will maximize your business exposure, help you generate targeted leads and then convert those leads into buying customers. Will you market online, using social media, Facebook, billboards, trade shows, at local meet ups. Do you have an elevator pitch (can you quickly tell someone what you do in 15 seconds or less) and create value while doing so? What are the price points for your products and services? Also, what are your sales goals?

#8 Do you need a staff or external support? While most of us are solo-entrepreneurs or small business owners, ask yourself can you achieve your marketing and sales goals by doing everything on your own? There may be some tasks you do not know how to do or even want to do yourself. If this is the case, you must account for future employees, the possibility of outsourcing or investing in learning the skills you need to run your ship if paying others is not an option.

The better prepared you are as an entrepreneur, whether you run a home based business or small retail shop, you must have a success map that will guide you along the way. The worst feeling you can have as an entrepreneur is to have your visions and dreams collapse because you failed to plan!