A business arrangement is a written description of your business’s future. That’s all there is to it–a file that explains what you plan to do and how you plan to do it. If you jot down a paragraph on the back of an envelope describing your trade strategy, you’ve written a plan, or at least the germ of a plan.
Sound impressive? It can be, if put together appropriately. A good business plan follows generally accepted guidelines for both form and content. There are three main parts to a business plan:
- The first is the business concept, where you discuss the industry, your business arrangement, your particular product or service, and how you plan to make your business an achievement.
- The second is the market section, in which you describe and analyze potential customers: who and where they are, what makes them purchase and so on. Here, you also describe the competition and how you’ll position yourself to beat it.
- Finally, the economic sectioncontains your income and cash flow statement, balance sheet and other economic ratios, such as break-even analyses. This part can require help from your accountant and a good spreadsheet software program.
- Finding the Right Plan for You
Business plans tend to have a lot of elements in common, like cash flow projections and marketing strategy. And several of them share certain objectives as well, such as raising money or persuading a associate to join the firm. But industry plans are not all the same any more than all businesses are.
- Types of Plans
- The Miniplan.A mini plan can consist of one to 10 pages and should include at least cursory attention to such key matters as business idea, financing needs, marketing plan and financial statements, especially cash flow, income projection and balance sheet. It’s a great method to quickly test a business concept or measure the interest of a potential partner or minor investor.
- The Working Plan.A working plan is a tool to be used to operate your business. It has to be long on detail but can be short on presentation. As with a mini plan, you can probably afford a somewhat higher degree of candor and informality while preparing a working plan.
- The Presentation Plan.If you take a working plan, with its low pressure on cosmetics and impression, and twist the knob to boost the amount of attention paid to its looks, you’ll wind up with an arrangement plan. This plan is appropriate for showing to bankers, investors and others outside the corporation.
- The Electronic Plan.The majority of industry plans are composed on a computer of some kind, then printed out and presented in hard copy. But more and more industry information that once was transferred between parties only on paper is now sent automatically. So you can find it appropriate to have an electronic version of your plan available. An electronic plan may be handy for presentations to a group using a computer-driven overhead projector.