- Green Belt
- Posts: 217
- Joined: Tue Jan 27, 2009 1:11 pm
I was brought up on 'artistic'business plans.
All around hatched these marvellous 'business' plans for getting hold of government funding for..not any business.So the business plan was seen as a flawed proposition.
I had to rediscover the business plan,reinforced by reading,how,in the real world,they are a really useful business tool,and an ongoing evolving one.
I found that developing a business narrative,starting at the beginning,and identifying relevant and crtical events and what was needed,to get into the market,and then to get established there,made it real and tangible.
A flow chart helped.
Then wrote a business plan around that.
I found that there were two stages in my narrative.
There was getting into the market,and then getting established there.
A successful outcome was based on whether,after effective marketing and having the means to deliver,there was sufficient demand for your product.
This is hard to write into your business plan.
Cash projections for year 1,2 &3,without knowing if there is a demand,i.e.people will pay for you product,is fairly abstract.
Even knowing what market share on which to base your business plan is pretty abstract.
The break-even point seems to be a useful reference point.
It is a well-established fact that a lot of new businesses fail,which maybe involves people having to work to pay back loans they took out to start off in the business.
For-by poor business practices,a reason for failing businesses would be overestimating the demand for the product/service,which seems to be an easy thing to do.
Consquently,I'm writing a two-stage business plan.
The first part involves getting into the market to test and quantify demand-see if the demand will sustain a business,
and the second stage ramping up production,setting up distribution systems,marketing,sales,and other infrastructure.
It's better,at it's bleakest,to go down with a pilot scheme,than go down with an expensive white elephant,expense/debt-wise.