Business Plans For Entrepreneurs
Why They Are Needed?

English vocabulary and phrases: Business plan, entrepreneur, small business, large business, business partner, investor, start up, venture capital, risk, executive summary, vision and mission, marketing, finance

What are business plans and why do entrepreneurs need them? A business plan is like a road map. It is a guide to where you want to go. It gives you the basic information that you need to follow to reach success in your business. If they lead you down the wrong road, that is where your business will go.

As a small business entrepreneur, compared to a large company, do you need a business plan? The answer I will give is yes and no. Not a very confident answer you may say. Business plans are important if you are beginning a new business. They are especially important if you need to present your new business idea to potential partners, those who might help you with startup funding, and potential employees who you want to convince to work for you or help you. If you are going at it alone, a structured business plan probably is not needed but rather more of an outline of what you plan to do and how you plan to get there.

So what is in a business plan? Usually a business plan has several parts or components. Below is a general outline of a basic business plan;

A. Introduction and Overview;

1. Executive summary: This is a short synopsis of the key points in the business plan. It is meant to generate interest in your business.

2. Vision and mission: This states the business philosophy and the basic business strategy.

3. Product or service: You should explain what it is and how it is unique. Why should people want to buy it? What is the competitive advantage of your product or service?

4. Current status of the venture: Is this an existing company that you plan to expand or a new business. How far along are you in the business?

B. Details of Major Business Components;

1. People: Who are the key players in the business going to be, from the management team, to the employees etc.

2. Marketing: What is the market and who are the target customers? Explain briefly your marketing strategy.

3. Operations: Describe the business facilities etc. If you are starting an Internet Business then state that.

4. Financial plan: Describe your present and anticipated financial status and needs. Try to determine what you will need to get started in the new business and what your projections are for sales, etc, for a certain period of time. If you don’t know then make and educated guess, but don’t say I’ll wait and see.

C. Extra Information;

1. Provide any other information that you feel is necessary, especially if you are trying to sell your ideas to someone else.

There you have it, the basic business plan for entrepreneurs. Again if you are going it alone and don’t plan to include anyone else in your business such as an Internet business, then some of the information may not be useful to you. However it’s still a good idea to write some things down as an outline. That way you will have some kind of road map that will help guide you. As with any plan the key is flexibility. Be willing to add or change different parts of the plan as needed. Go back to your plan on a regular basis to see if you are following what you planned or have things changed for the better. A plan is just that, a plan, nothing more and nothing less.

Maybe you start out with a specific business strategy but you change it somewhere along the way. No problem with that. Just update your plan with the new strategy or strategies. The plan also acts like a diary or log. It helps you see on a routine basis where you started and where you are going or where you succeeded or where you might have encountered problems. Don’t throw your plan out once your business is going. Keep it and update it like a diary.

Tom Metts - Contributor/Consultant

Activities: Project Business

In groups of 2 – 4 people, begin to make a business plan. Start by brainstorming to find an idea for a product or service that fills a need for a particular market. Follow the above guide in making your plan. (This project can be modified for a very short or a very long lesson covering several days and more).