Does Your Business Plan Fail To Address 3 Critical Questions?

Small businesses start because entrepreneurs fall in love with an idea, not because they can’t wait to draw up a business plan.

One common challenge with business plans is that investors and other evaluators often have conflicting priorities and expectations, an article on the Fox Small Business website explains. As you draft a plan for your small business, make sure it addresses three critical questions about growth, projections and staff.

1. Is your business in a growth market?
   The most important factor for success — by far — is to operate in a growth market. Even if you struggle in other areas, a strong growth market can help you overcome many other problems, so this is a crucial area to address in your business plan. Explain how your business will enter an expanding, thriving industry, and use its investment to achieve above-average growth.To identify growth markets, you’ll need to look ahead, talk to people in the industry and do your research. Read industry reports on the market or subject you’re interested in and subscribe to relevant newsletters.
2. Does your plan demonstrate realistic goals and steps?
   “The idea doesn’t have to be reasonable, the plan does,” says Charles North, president and CEO of the Dutchess County Regional Chamber of Commerce, speaking with Fox Small Business. North wants to see four years of “reasonable” projections, detailing sales, expenses and the bottom line. In a small operation, it’s easy to overlook potential issues; test your plan with someone with an objective opinion who can play devil’s advocate and push you to reconcile your business goals with reality.
3. What staff does your business require?
   You can’t do it all alone; a good business plan sets forth the necessary roles, which can be filled later as appropriate. “It also shows that they recognize their own limitations” and strengths, as well as “the need to bring in others who know what they don’t in order to reach the goals they envision,” suggests Larry Holfelder, CEO of Connect My Advisors. When you’re ready to hire, the right skill set is important, but someone who’s motivated and wants to learn can pick up the skills they need.

In the end, a new venture always needs passion and inspiration. A solid business plan offers evidence that the dream is rooted in reality.

We appreciate your feedback. What resources would you suggest to an entrepreneur preparing a business plan for a new company? Please share your thoughts in the comments section.

Source: Fox Business Small Business Center, May 2013