Developing The Perfect Business Plan

The most essential first move in developing any new business is to create a custom business plan. That business plan will become your intellectual property that you have a right to enforce the use of in the event a prospective backer decides to exclude you. An entrepreneur needs to develop a business plan the same as an architect needs to draw up blueprints before building a house. While there are many different templates available for developing a business plan, every business plan should include who, what, where, why, and how as the main elements. A template won’t be of much help unless you understand the business science involved and can explain the elements of the plan. This includes issues such as theories on startup capital and the various stages of finance, the basic structure of the business, governmental compliance, tax structuring, sales, and marketing, to name just a few. The business plan should also address the future of the enterprise. A business plan involves anticipating a series of stepping stones that will be necessary to reach different milestones at different times.

The Dunning–Kruger effect is a cognitive bias whereby people with little experience, expertise, or knowledge regarding a subject tend to overestimate their ability or knowledge. On the other hand, there can also be an opposite effect for high performers where they instead, tend to underestimate their skills. It’s not uncommon for people to underestimate their abilities and then meet someone with fewer abilities who are maximizing their efforts. Thereafter, they may feel more confident in their abilities and tend to want to venture outside of their comfort zone. It’s that, “if they can do it, surely I can do it” attitude that has inspired many an entrepreneur. Entrepreneurs need self-confidence, but they also need to have a foundation to work from and be careful not to exceed their capabilities.

Ideally, the nascent entrepreneur who is just starting has taken some business courses and has a fair understanding of the business world. Some entrepreneurs lacking in business expertise may want to just try and wing it with the intent of learning as they go. This book is designed more for the latter, by providing a succinct overview of the various business sciences and how they can be incorporated into designing a business plan.

Very few business plans are strictly adhered to throughout the growth of a company as circumstances and resources may change along the way. It is equally important to make corrections as time goes by to adapt to the changing needs of the business. Understanding and anticipating changes is essential to survival in ever-changing markets. Your goal should be to adapt your plan as business needs require. You have to be able to adapt, quickly.

Understanding leadership, management, administration, finance, and marketing is the key component of any successful business. All of these subjects need to be addressed in the business plan to better understand the larger picture of how business works. Therefore, it is imperative to employ continuing education as a part of your business plan and professional future.

This book has been designed to help make you aware of what common business knowledge is available and pick and choose which components you believe will benefit your business plan. After the plan has been defined, it can literally be something you can take to the bank. Bankers and lenders require a written memorandum that explains how their money will be used to make their assessment. The business plan is what they have to go by. Your job is to convince lenders that you have what it takes to make everybody rich. At the same time, you want to also protect your intellectual property rights in case they like your business plan, but not you.