Every new business needs a written plan

Taking a trip without a map may get you lost, and trying to run a business without a written plan is likely to have the same result.

A business plan is a map, your company's written guide into the future. Not only does a good plan let you know where you are and where you're headed, it provides potential lenders and investors with a portrait of your company.

Each plan will differ, but certain items are essential.

• First, you must define your market niche and identify the competition. How does your product or service differ from theirs?
• Next, determine your product and delivery costs; then look at your product pricing.
• Do you need new equipment or skills to compete now and in the future?
• What is your marketing scheme?
• How will you get the capital you need for your plans?
• Examine your key operating ratios, and determine projected profits for years covered by the plan.

Most business plans fail because they lack detail. A well-developed plan gives a new company immediate respect in the eyes of lenders, not only because it shows you to be thorough and far-sighted, but because lenders rarely see good business plans.

Wayne Gretzky, when asked the reason for his success said, “Some people skate to where the puck is. I skate to where the puck is going to be.” A good plan should help you do the same for your business.