I am amazed at how many resources there are and how much information is available today on writing a businness plan. There is softwar, documents, templates, outlines and a lot of experts that can help you. Most experts and resources will tell you exactly how to write a businness plan and maybe even provide a template that only needs minor changes to fit your needs. All the emphasis is put on "writing" a solid businness plan.

I agree that you need a good businness plan but I don't believe that you need to spend hours, days or even months writing your story so that people can read all about what you are going to do. In the first place, most of the people that are going to read your plan are bankers or investors that are not so much interested in your story as they are in whether you will succeed. Secondly, you may spend a lot of time writing this great and wonderful story only to find at the end that you cannot make it work.

You need to start by analyzing the feasibility of your prospective businness by using good softwar or a professional that can help you do the researhc and develop a set of projections that will be sure you have covered everything. Most businnesses fail because they have not accurately projected their cash flow needs and perhaps because they have not been realistic in their projection of sales and expenses. Remember that writing a good plan is about first doing it for yourself.

For your plan to be feasible you have to decide what goals you want to accomplish and how you will get there. For instance, you may now have a job that provides you with a steady income. How much must your businness make to replace that income and how long can you survive if your income is reduced? Can the project make enough money to satisfy the needs of investors? Investors typically want higher than normal returns on a high-risk investment like a start-up businness. Can you meet the loan payments that are required and do you have sufficient equity in the businness to satisfy the lender requirements in order to get the loan in the first place? Lenders will look critically at your cash flow and the amount of cash and assets you have invested in the businness.

Several years ago I had a newly expanded businness that in the first year of expansion increased sales by 50% and produced a substantial profit in the same year. The lastest was that I did not properly project the cash flow needs and ended up in a position where I could not pay the bills or payments. How could this be? I asked myself the same question when I had to shut the businness down. That is when I first learned about the importance of projections and analyzing the feasibility before leaping in. An inch from success will not get you where you want to be.

Take your time to do your projections and researhc each and every aspect of your businness. It is not just guess work. In fact, you can be very accurate with all your costs and expenses. If you talk to all of the appropriate professionals, suppliers and service providers you will probably be as accurate as possible in most areas of your projections. The area that requires the most researhc is sales but, there are good techniques to come up with accurate estimates.

If you have researhced and prepared your projections correctly and your businness is feasible you have done a whole lot more than just create a financial projection. You have discovered what it takes to make your businness work, you have created a network of professionals to assist you in the success of your businness, and now it is easy to write the rest of the story. So, when you set out to "write" your businness plan, start with the feasibility because it will tell you a lot about your businness before you even get started. If it looks good you will be able to sell it to the bankers and investors. But, if it doesn't look good you haven't wasted a lot of time writing a fiction novel.

Look for the next article on Writing A Successful Business Plan - Part 4 - "What are Projections" of the Becoming Wise - Wild & Free series.

About the author:
Written by Rod Francis - President of Advantage Venture Systems Inc. creators of the Venture Planning System(tm) Pro businness plan softwar @ www.VPSpro.com
Suite 207, ##1-1081 Central Ave. N., Swift Current, SK Canada S9H 4Z1
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