282 Chapter 12
12.2 PREPARING A BUSINESS STRATEGY AND PLAN.
Planning is the key to success in any business. The importance of planning cannot be overemphasized.
It may take two or three weeks to complete a good plan. Most of that time is spent in research and
reevaluating your ideas and assumptions. Taking an objective look at the business plan will identify ar-
eas of weakness and strength, pinpoint needs that might otherwise be overlooked, and spot opportu-
nities early. It provides a road map to make sure you are going where you want to go to achieve your
business objectives.
A business plan is an operating tool, which, when properly used, can help manage the business
and work effectively toward its success. Moreover, lenders require one. A well-written business plan
communicates ideas to others and provides the basis for a financial proposal. It will also determine the
feasibility of a project and lay out the action necessary to complete it. A good plan can help convince
a bank or potential investor that you are worthy of assistance in funding this new venture. The plan it-
self may not get you funding, since it is very difficult to find capital for startup businesses. As the busi-
ness owner, you are expected to have sufficient startup capital from your savings or from a bank loan
based on income other than the business.
Putting a successful business plan together is both an art and a science. While there are a num-
ber of ways to format a business plan, the following outline presents key elements to consider in de-
veloping your business plan:
Executive Summary.
The executive summary provides an overview of the business plan and should not exceed two pages.
Even though it will be at the beginning of the plan, it should be written after the rest of the plan is com-
pleted. It brings together the significant points of the project and should convey enthusiasm and pro-
fessionalism. Typically, investors will not spend more than a few minutes to review a business plan to
determine whether they should read it in detail or go on to another plan. It is therefore essential to pre-
pare an appealing, convincing executive summary to capture the investor’s attention and imagination
and to make him or her more likely to read the remainder of the plan. It should be concise yet compre-
hensive and outline the fundamentals of the company, how it came into existence, and the people
linked to it. If the business plan is part of a loan application, state clearly how much you want, precisely
how it is going to be used, and how the money will increase the business’s profits, thereby ensuring re-
payment. In essence, the executive summary is the most important part of the business plan, as it will
dictate whether or not the remaining pages are read.
Company Description, Vision, and Mission.
In any organizational venture, the first step is to develop a realistic vision for the business. This vision
typically reflects an overall picture of the business as you see it in three or more years’ time in terms of
its likely physical form, size, activities, etc. Describe the company strengths and core competencies
and the factors needed to make the company succeed. This should be followed by the company’s
stated mission. A mission statement should concisely reflect the direction of the company’s business,
its goals, and its expected achievements. Define both the key short-term and long-term goals and ob-
jectives and which factors are to be focused on in the short term and which in the long term. The com-