About the Author
Brian Hazelgren has authored and coauthored five books, including Your First Business Plan and The Complete Book of Business Plans, and has produced two business CDs.
Joseph Covello is the founder of The Covello Group, a professional firm specializing in business planning and finance located in Clearwater, Florida, and serving the greater Tampa Bay area.
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When it comes to writing a business plan, most people think it's about as much fun as taking a trip to the dentist. They usually focus on the pain, rather than the results. Let's face it, writing a good business plan will take time, patience, a lot of thinking, hours of research and hours of writing and editing. But think of the results. You will know your business better, and be better assured that it will flourish. In addition, you will have a better chance of obtaining financing. Most importantly, you will know how to conduct business and compete at a more sophisticated level. The time invested in developing a business plan can make the difference between success or failure.
Consider, also, the edge you will have over your competition. Millions of businesses do not have a business plan. They are simply reacting to the conditions that exist, much like a sailboat on a windless day. The point made here is that when you take the time to fully develop a sound business plan, you will have a greater advantage in maneuvering and changing your course when the climate is not to your benefit.
A Few Facts:
About one million new businesses are started each year in America; of those, approximately two hundred thousand will survive five years. This translates into one in five businesses making it to their fifth anniversary. This is an alarming statistic! Why in the world would only one in five businesses in the "Land of Opportunity" survive so short a period of time? There are several reasons; however, the most common happens to be the most controllable. There is no magic equation for success, but one basic rule holds true: "A business owner who fails to plan, plans to fail."
A business plan helps entrepreneurs and business managers think through their strategies, balance their enthusiasm with facts and recognize their limitations. It will help you avoid potentially disastrous errors like undercapitalizing, creating negative cash flow, hiring the wrong people, selecting the wrong location and pursuing the wrong market.
A winning business plan requires time: fifty to one hundred hours to write an effective business plan which would include research, documentation, analysis and review.
Entrepreneurs should start planning at least six months before they initiate a new business. This takes into consideration the time you need to devote to its "start-up" while working another job. Six months gives you time to sharpen and focus your business ideas, test your assumptions and improve your management skills.
If you don't want to wait six months, then dig in and begin your incredible journey. Maybe you are the type of person who can accomplish the following processes in a shorter period of time; however, these essential elements must be part of your task.
