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Resource Planning For Your Business Plan
Identifying the resources you need to grow your business
Why Is Resource Planning Important
How to start resource planning, the bottom line, frequently asked questions (faqs).
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A business plan helps you organize your goals and growth plans for your business. Identifying business resources you'll be starting your business with already, and accounting for the resources you'll need to acquire after launching the business, is a crucial step in business planning.
Key Takeaways
- A business plan helps you organize your goals and growth plans for your business.
- Resource planning help you account for resources you have, plan for resources you need and ways to optimize their use
- You can plan for physical, people and technical resources in your business plan
Resource planning help you account for resources you have, plan for resources you need and ways to optimize their use. Among other things, even the most simple business plans are designed to walk you through the activity of describing every source and the exact dollar amount of your initial equity capital, as well as account for the equipment necessary to produce your products or services.
It can be difficult to accurately estimate your future resource needs, which is why this startup mistake is one of the most frequent contributors to young businesses running out of cash early on.
A very important section in your business plan is about the finances of your business, and that includes how much you hope to spend on resources you need to acquire and maintenance expenses on assets you own. Your plans for obtaining the necessary personnel, equipment, and cash to meet your capital expenses will need to be detailed throughout your business plan.
You may need financing from a bank or investors or will invest your personal savings in the business, and resource planning will come in handy for that too.
Resource allocation plans are what your potential investors and business partners are going to need to see before jumping on board with your new company.
There are different types of resources and you need to budget and plan for them accordingly. In describing each of the resources that you have and need for your business to reach profitability, position each of them in terms of the value it will bring to the company, both in the near term and down the road.
To figure out exactly which resources your business is going to need, and account for those in your business planning process, ask yourself these two crucial questions:
- Does starting and growing your business require having staff on hand? If your business relies upon output from people other than yourself and your business partners, you're going to need to allocate resources for hiring staff at fair market rates.
- What type of equipment or fixed assets will your business need to get going? If your business is dependent upon purchasing or leasing equipment or other fixed assets like retail and office space, these are major considerations as you plan out your resource allocation.
Physical Assets
Depending on the nature of your business, you may have varying need for physical assets. However, in all likelihood you'd need some sort of office furniture and definitely some computers. Physical assets could also include office space, storefronts, manufacturing facilities and equipment necessary for your business. For example, if you own a baked good business, baking equipment like mixers and ovens would be physical assets you'd need to plan for.
Personnel and People
There are different types of people that can be a part of your business. People you hire, for example, can be employees or independent contractors and there are different cost implications for your business depending on whether you hire the former or the latter.
Investing in skills and capacities for people in your business is also an important part of resource planning.
How about mentors, key advisors, supplier connections, and other intangible resources for your business? These types of relationships whose value to your business can be immense, also need to be accounted for within your business plan as they'll have a very large impact on the future growth of your company.
Think of the massively positive effect your company would experience if you had a friend or family member that was a decision-maker at a large company who'd be your perfect first customer. It would undoubtedly be one of your key strategies for driving the early growth of your company. So, as you're planning your resource allocation, you'd naturally be spending in areas that make your young business more appealing to the target customers you want to serve.
Technical Resources
It is a good time to evaluate your technical resources and requirements as well. Some businesses rely more heavily on technology or intellectual property than others. Technology-dependent companies will need a strong IT network to get started. If building your own website won't be any trouble, then that's one major cost you'll be able to avoid as you get started with your company. Otherwise, you may need to allocate for web design, development, and other website-related expenses.
Regardless of your situation, don't be intimidated by the upfront costs of starting a business. Instead, keep in mind that in today's age, your product or service will only be as good as the technology that supports it, and if you buy or build low-grade gear, you’ll probably have to replace it in a few years anyway.
Clearly, there are a lot of different expenses to take into account as you allocate the resources for your new business. However, forcing yourself to go through this activity in extreme detail while building your business plan will save you a lot of headaches and potential failures in the future.
What are assets and resources in a business plan?
Resources can be anything that helps you operate or run your business. Assets are a type of resources that help you achieve you business. Assets can be cash, or physical assets such as equipment or intangible assets such as the brand of your business. In a business plan, you talk about the resources you have and the resources you need to acquire to help your business grow. You also account for your assets on your balance sheet. A strong balance sheet presented in your business plan can be appealing to potential investors.
Which components of a business plan are most useful to attract investors?
Each section of a business plan is important to potential investors. An executive summary gives your investors an elevator pitch to your business. Company description explains to them how your business is solving a market need, while market analysis shows investors you understand your industry and competition. Sections on organization, product details and marketing plans dig deeper into your vision for your business and how its organized. And the financial information component helps them see if you idea is worth putting their money into.
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New to business planning? Start here
What should i include in my business plan.
You must have an executive summary, product/service description, market and competitive analysis, marketing and sales plan, operations overview, milestones, company overview, financial plan, and appendix.
Why should I write a business plan?
Businesses that write a business plan typically grow 30% faster because it helps them minimize risk, establish important milestones, track progress, and make more confident decisions.
What are the qualities of a good business plan?
A good business plan uses clear language, shows realistic goals, fits the needs of your business, and highlights any assumptions you’re making.
How long should my business plan be?
There is no target length for a business plan. It should be as long as you need it to be. A good rule of thumb is to go as short as possible, without missing any crucial information. You can always expand your business plan later.
How do I write a simple business plan?
Use a one-page business plan format to create a simple business plan. It includes all of the critical sections of a traditional business plan but can be completed in as little as 30 minutes.
What should I do before writing a business plan?
If you do anything before writing—figure out why you’re writing a business plan. You’ll save time and create a far more useful plan.
What is the first step in writing a business plan?
The first thing you’ll do when writing a business plan is describe the problem you’re solving and what your solution is.
What is the biggest mistake I can make when writing a business plan?
The worst thing you can do is not plan at all. You’ll miss potential issues and opportunities and struggle to make strategic decisions.
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Business planning FAQ
What is business planning?
Business planning is the act of sitting down to establish goals, strategies, and actions you intend to take to successfully start, manage, and grow a business.
What are the 7 steps of a business plan?
The seven steps to write a business plan include:
- Craft a brief executive summary
- Describe your products and services
- Conduct market research and compile data into a market analysis
- Describe your marketing and sales strategy
- Outline your organizational structure and management team
- Develop financial projections for sales, revenue, and cash flow
- Add additional documents to your appendix
What should a business plan include?
A traditional business plan should include:
- An executive summary
- Description of your products and services
- Market analysis
- Competitive analysis
- Marketing and sales plan
- Overview of business operations
- Milestones and metrics
- Description of your organization and management team
- Financial plan and forecasts
Do you really need a business plan?
You are more likely to start and grow into a successful business if you write a business plan.
A business plan helps you understand where you want to go with your business and what it will take to get there. It reduces your overall risk, helps you uncover your business’s potential, attracts investors, and identifies areas for growth.
Having a business plan ultimately makes you more confident as a business owner and more likely to succeed for a longer period of time.
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