by Aaron Harris
Posted 7/8/2013 12:00 am
Updated 8 months ago
A business plan is an important part of successfully starting and eventually running a small business or entrepreneurial venture. The business plan is a dynamic written document that has a number of generally agreed-upon descriptive sections in it. According to the SBA, these sections are:
- An executive summary,
- Company description,
- Market analysis,
- Organization and management,
- Service or product line,
- Marketing and sales,
- Funding request,
- Financial projections and
- Any additional appendices.
These nine parts make up a document that can be used by business stakeholders to ensure its success. Let's focus on how having a well-written business plan can positively affect internal and external stakeholders in any small business.
As the owner/creator of your small business, you are the No. 1 internal stakeholder. It's your time, money and effort that will be put into this business. You likely had a somewhat broad idea that you felt could solve a problem or provide a solution in the form of a good or service in a specific market. As you sat down to start planning your next steps to take in order to turn it into an actual business, you were faced with a lot of uncertainty in regards to where to go next. This uncertainty could be sufficiently quelled with a well-written business plan.
As you start fleshing out your business idea, it's important to start considering all the sections of your business plan as mentioned above. Starting out, you may think that considering all of these as a whole is a little over the top, but at some point during the building of your business, you will need to think about every single section in order to be successful. A business plan can serve as a sort of "road map" to where you want to go as a business. It's hard to get to your destination if you don't know where that is. A business plan can give you something to aim toward as you progress.
At some point during your small-business adventure, you're likely going to need help from external stakeholders. You may need assistance from stakeholders in other areas, but often these external stakeholders are parties from whom you'd like to borrow money — friends and family or lending institutions. When borrowing money, most of the time the No. 1 consideration for the lender is the borrower's ability to pay the money back. There are many specific things to consider when determining if/when the borrower can pay the lender back — such as revenue, projected growth, etc. — but a solid business plan will definitely help get the conversation started.
A well-written and organized business plan makes you, as a small-business owner, look credible — like you actually know what you're doing and that you've put some thought into where you want to take your venture.
There are many resources available to the prospective small-business owner on writing a good business plan. Many of those resources can be found at Connect Arkansas' ArkSourcelink.com in "The Plan" section.
Aaron Harris is an entrepreneur training specialist for Connect Arkansas, a project of Arkansas Capital Corp. of Little Rock. Email him at AHarris@Connect-Arkansas.org.