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The Business Plan
plan is like a road map. The process of writing a business plan helps
the consumer make good decisions and reach his or her goal or destination.
If the consumer answered Beginning to Develop Your Business Plan questions, he or she has already done some of the initial development. In most cases, you will not be working directly with the consumer while he or she develops the plan. Although your VR agency’s process may differ, usually the consumer works with a consultant to develop the business plan. It is important to stress to both the consumer and the consultant that the business plan must be developed by the consumer. The consultant’s role is to guide the development of the business plan. The consultant assists with sources for conducting marketing research, problem solving, presentation and format of the plan, and funding.
Why Develop a Business Plan?
The number one reason businesses fail is lack of planning! Instead of making mistakes on paper, business owners too often make them with real money and real customers. That is why most business funding institutions and agencies require business plans and refuse to fund business start-ups that cannot provide a well-developed plan.
Entrepreneurs pride themselves on being active and optimistic. They identify a niche and are driven to fill it. They invent new products, processes, or services to manufacture and/or sell. To them, planning is an academic exercise for large corporations, classrooms, or consultants.In reality, planning is key to the success of any small business.
Marketplace or economic change has a greater impact on small businesses than on large corporations.Planning is the dynamic process that prepares small businesses for the future. A business manager/owner has four basic functions: plan, organize, staff, direct and control the business’s operation. Each function must take place in the order listed. Planning is the first activity, and all other activities are premised upon it.
Benefits of Planning
The steps in the business planning process are the same for all businesses, but the results differ for each one. A manufacturing company specializing in high-quality custom orders, a fast-food restaurant, a clothing retailer, and an organic herb farm all have very different plans. Each business plan is tailored to the individual business and business owner.
Parts of the Business Plan
This book provides a general business plan format and describes the necessary information for each section. We have included a sample business plan at the end of the book. We encourage you to look at corresponding sections of the sample plan as you study the remaining sections of Chapter 6. This will help you understand how each section pertains to a business, so you can evaluate business plans that are submitted to you. In general, the information contained in a business plan should be consistent with this format, although section titles and order can show some variety. A business consultant may use a slightly different format – that is OK. However, the following information should be included in every business plan.
The Executive Summary
The Business Description
The Marketing Plan
The Operations Plan
The Financial Plan
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