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Mary Jane Stenberg had no concept of what a business plan was until in 1994, she participated in a mine-month Step Into Business program, sponsored by the Business Development Bank of Canada. Her fledgling Langley BC company, Stenberg and Associates, provides employment training for a variety of career opportunities, and after two years in business already employed five people. Mary Jane managed to pay the bills and draw a salary, but her dreams were to expand - yet she didn't know how to go about it.
Mary Jane now heads a highly successful business with two locations employing 30 people. How did she grow her business so rapidly and successfully? She attributes her success to always using a business plan before making and decisions.
"I followed the business plan I had learned to prepare during the course, and used the template for other things, such as expansion," she explains. " I learned so much. Whenever I wanted to get larger, I revisited and revised my plan. You have to have your plan and abide by it, but don't be afraid to change it".
Just what is a business plan - and why is it so important for a business to have one? A business plan is a well-researched map of your future business. It takes those mental dreams and ideas and converts them into a logical blueprint for your business.
The average new entrepreneur doesn't research or plan their business in depth, which causes a high percentage of failure rates. Statistics cite an 80 to 90 percent small business failure rate within the first two years of start up. A high percentage of business owners do not prepare business plans.
The three main components of a business plan are research, financial viability, and marketing strategies. a business plan follows a set format, allowing the entrepreneur to work through all stages of the potential or current business to assess its viability before any financial commitments are made.
The most important component is market research, because it is no use starting a business if there is no need in the marketplace for your product or service. A well researched plan will prove both a need and a niche for the business, which should also withstand the ever-changing consumer an economic trend. You should regularly revisit, reevaluate and revise your plan to assess any changes in the marketplace, the competition, or your profit margins.
As our depressed economic climate dictates that most new jobs will come from self-employment, a multitude of jobless people are starting their own businesses, many of them craft-related. It is often difficult to obtain financing with many people starting their business with under $10,000. capital, often without the necessary funds available to grow and market their venture.
Some take a dream or passion and start part-time, not thinking about future growth or expansion. Many potentially profitable businesses never get off the ground due to lack of planning and research. Uncontrolled and unplanned growth can cause the downfall of a business.
For securing bank financing, business plans are a mandatory requirement, No lender will entertain the thought of a small business loan or line of credit without a workable plan. What do banks look for when a business plan is presented to them? Manager of the Fraser Valley Business Banking Centre for the Royal Bank, has noticed a marked improvement in the quality of business plan presentations. he attributes this to computer programs, more business education, information, and more thought being put into business start-ups. "Ten years ago, people would walk in empty-handed for a business loan, with no thought being put into their business," he recalls.
"When we review an application, we first look to see if the plan works - that is - to see if the arithmetic is correct." "We question applicants to ensure they understand their plan, as some people use others to prepare their plan. It must be realistic and make sense. They must have identified to whom they are going to sell, their market niche, and the demographics of their market, We like to see that they are conversant with economic and consumer trends, and that they have a reasonable idea of what they want to do."
Using a business plan as a decision making tool gives a growing business researched and planned direction, Would you fly a plane without a flight plan? Of course not, nor should you operate your business without some careful planning, constant monitoring, and a positive attitude.
Mary Jane Stenberg advises entrepreneurs to "Follow your passion and believe in yourself. Visualize what you want to achieve and go for it! Don't let anyone tell you that you can't do it."
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