The Reference Section

A collection of wealth improvement articles

Every business needs a plan
Business Plans

Having a business plan is necessary for survival in today's competitive business environment. A written business plan is as essential for a small business as it is for large corporations. A good business plan will help you focus on current and potential problems and assist you, your advisors, and employees in improving net profit.

Many owners of small businesses fail to put their plans in writing. It takes time to get your plan reduced to writing, and since there are so many other things to be done, the business plan goes unwritten. You wouldn't consider building a building without written plans to direct those who are assisting you. Likewise, you'll find your business more profitable if employees and advisors have a clear picture of what it is you are trying to accomplish.

The fact that you have reduced your business plan to writing does not mean that it's engraved in stone. Your business plan, like your building plans, is a guideline. Circumstances arise which will require that the plan be altered; that's as it should be.

Involve your employees in the development of the business plan. Your employees have a lot to offer and their involvement will make them more enthusiastic about putting a plan to work. At least once a year you should hold a brainstorming session to review the following questions:

  1. Should we increase or decrease the line of products we offer?
  2. Is our marketing and advertising approach as effective as it can be?
  3. Are there employees whose work assignments should be redefined to make the company more efficient?
  4. What is the company's financial condition, past, present, and future? Are there policies which need to be changed to improve the financial condition?
  5. Where do we want the company to be a year from now and five years from now?

Your business plan should be submitted along with loan applications to convince your lenders that you are serious about your business and that you have the ability to repay borrowed money.