Small-Business Start Up
Starting any business requires careful investigation and
planning. The SBA publishes valuable guides for those
interested in starting a business. Some of the SBA's most
popular publications are Going into Business, Planning and Goal
Setting for Small Business, Developing a Strategic Business Plan,
and ABC's of Borrowing.
A person can improve his or her chances of business success by
taking the time to write a business plan. The business plan is
an organized process of putting down on paper what the person
is trying to accomplish with the business. It describes the
business, the good or service, the customers, the competition,
and the financing of all activities necessary to enter business and
make or sell a good or service. It is the game plan of the proposed
new venture. The business plan is also called a prospectus,
proposal, or blue book.
Starting a business with no plan, goals, or direction is a good
way to fail. Competition, personal skills, and a program of growth
must be thought out carefully. Preparing a business plan forces a
person to take a careful look at what the business will be, what
resources will be needed, and how the business must be
managed. The business plan also serves to show banks or
investors that the individual is organized, serious about the
business, and willing to discuss all aspects of the business,
including motivation.
No business plan can be perfect. Unexpected market changes
occur that cannot be controlled. However, a well-thought-out
business plan provides the person, banks, investors, and others
with a framework to analyze and evaluate the idea, prospects for
success, and potential competition.
There is no specific formula for preparing a business plan.
However, most business plans are brief, carefully prepared,
accurate, and up-to-date. The Appendix to this chapter contains a
business plan for a fictitious service business named Events
Unlimited. We present it as an example of how to construct a
business plan. It does not include information about research
and development or about manufacturing, because the fictitious
business deals with a service. We also have not included the
financial documents because we have not yet covered this type of
material in the text. Remember that a complete plan would
typically include financial, accounting, and cost data.