Essay About Business Planning And Small Business

Business Planning
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Business Planning and
Financial Forecasting
A Start-up Guide
Ministry of Small Business and
Economic Development
Ministry of Small Business and
Economic Development
Western Economic Diversification Canada and the
Ministry of Small Business and Economic Development are pleased to publish
Business Planning and Financial Forecasting: A Guide for Business Start-Up.
This web-based guide is available on Small Business BCs website by clicking on
Small Business Guides at www.smallbusinessbc.ca.
For all your other business information needs go to British Columbias awardwinning
resource centre for business information and planning tools.
Small Business BC
Suite 82, 601 West Cordova, Vancouver, BC V6B 1G1
Phone: Toll Free 1 800 667 2272
In Greater Vancouver 604 775-5525
Fax: 604 775-5520
e-mail: visit www.smallbusinessbc.ca/email
website: www.smallbusinessbc.ca
Business Planning and
Financial Forecasting
A Start-up Guide
A Start-up Guide | 1
The Business Plan
Introduction
You want to start a business – or expand your existing business. You have a great
idea, super attitude and the entrepreneurial spirit. So you head down to your local
bank or financial institution; you sit down in front of the credit manager and start
to explain this brilliant idea when she interrupts you: “That sounds great, but where
is your business plan?”
This scenario is played out every day in Canada – people with ideas who want
to plunge into business without having done a business plan. The purpose of this
guide is to explain in simple terms the business plan concept and to show you how
to put your own plan together.
A Start-Up Guide leads entrepreneurs through the business planning process.
By describing everything from Vision and Mission to Operational Strategies, the
Guide provides an easy to read description of your new business concept. The
affiliated “Financial Planning Template” helps entrepreneurs assemble their Starting
Balance Sheet, Pro-Forma Income Statement and first year Cash Flow Forecast. This
MS Excel template is available at
FinancialTemplate.XLT. There is plenty of help available to you including courses
from your local college or school board and of course the services and information
resources of Small Business BC, including the Interactive Business Planner located at
www.smallbusinessbc.ca/ibp.
Why do a Business Plan?
Your own thinking process is solidified through the planning
process.
The planning outline provided in this guide leads you through a series of questions
and issues that you should consider when thinking about your business. Remember
that you are an investor in your own business. You are the first person who must have
confidence in the validity of your business concept.
Your bank or financial institution will need to be convinced of the
viability of your business, or your business expansion.
The business plan is a communications tool to inform and influence the reader towards
some action – providing a loan, extending credit or investing in your business.
Your business plan provides some guideposts in running your
business.
You will set goals and then, once you are in business, you can measure those goals
against the actual performance. Goals should be specific, measurable, achievable,
realistic and time limited – SMART.
2 | Business Planning and Financial Forecasting
What is in a business plan
There seem to be as many kinds of business plans as there are business
planning guides. There are two ways to look at the business plan: by stage of
development, and by target reader. Under the stage of development, there
are generally two ways to divide the planning style: start-up plans and plans for
ongoing businesses. Under the target reader there are also two ways to look at
Graphically, we can look at it this way:
There are of course many variations on the general categories. (For example, a
rapidly growing business requires a slightly different emphasis for both its strategic
and loan / investment plan.) Although there are different plans and different readers,
there are similarities in each of the four plans – including the financial forecast, which
is common to all business plans.