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So, you want to start a business? Well where do you start? Start where all great things start... With a plan! Now, before you freak out the depth that goes into an actual business plan, just remember it doesn't have to all be written at once. Furthermore, thinking of just how to draw up this business plan of yours will force you to start brainstorming where you want your business to go, and how to get there.
It's exciting! Oftentimes when we start something, we have no idea what we are doing, but think of this as an adventure, and you are beginning to plan your route up the mountain. All you need is a vague idea of where you want the business to go, and then start trying to figure out how to get there. Let's dive in!
What is a Business Plan?
At the end of the day, a business plan is simply the identification of your business in the written word. It serves to identify and describe the purpose of your business. Furthermore, a business plan analyzes the potential of your business. This is why it's important to draw up a business plan.
A good business plan introduces your business to others. On top of that, a good business plan is a great management tool for you that will provide economic and financial projections. Not to mention, as said earlier, a business plan is a great planning tool that forces you to define your business objectives and goals.
During the writing of this business plan, you will determine how feasible your business is, and be able to make tweaks to make your business realistic, and profitable!
Typical Business Plan
yes, there is a typical format to a business plan, and it includes the following:
- Executive summary
- Overview of objectives
- Products and services
- Marketing opportunities
- Sales and marketing
- Competitive analysis
- Financial analysis
Golly gee that's a lot! Take your time on this. Take time to slowly draw up a business plan instead of shooting to get it done overnight. Let's break up these sections into small, digestible chunks.
The executive summary is just that, a summary. Here you will briefly outline the company's purposes and goals. To do this, vaguely describe the other chunks in your business plan. You want this to be something anyone can pick up and get an understanding of where you are, where you're going, the why behind it, and how you plan to get there. And they should be able to do this simply by reading the executive summary.
Overview of Objectives
When drawing up a business plan, include a section that overviews the objectives of your business. Talk about things like your customer base, how you will serve them, what your business will provide, and what your business strives to achieve.
To write a great overview of objectives section, you must first define your audience, and who your customer base is. Have a clear definition of this. Think about the perfect customer for your business. What do they like? Are there things they need? Why is your business the right fit for them? What would they be looking for that only you can provide?
Above all, your business exists to serve others. To correctly serve one must know how they can be of service. Once this is nailed down, you can clearly define the objectives and goals of your business.
Products and Services
Here is the section where a more in-depth explanation of the products and services offered by your business. When you draw up a business plan, analyze similar products and services already available in the market, if any, And ponder how yours will be different. How will your services be unique? This is the section in the business plan that should capture all of that.
Furthermore, dig a layer deeper. Analyze whether or not profit margins for the product or service are possible. Will it cost you more to provide the thing, than what you would consider as a reasonable price for it? These are the things you want to explore. And document your findings here. Explain how what you have to offer is profitable.
When you draw up a business plan you must take time to complete market research. This is research on the needs, wants and desires of your target audience. Provide proof that what you have to offer is actually in demand in the current market. Learn about the consumers needs and preferences, and see if your business fits these.
When people look at your business plan, they should have confidence that your business is in-demand for the current times.
Sales and Marketing
As said numerous times around this blog, good marketing is not about convincing anyone of anything, rather good marketing is about finding those that already agree with you. Marketing is more than just ads.
Here is where you will clearly explain your marketing plan. How you will grow your business, and spread the word. This is an essential step on how to draw up a business plan.
Marketing for a small business is a lot of relationship building. and you want to explain how you plan on going out and building those relationships. Give any person reading this confidence in your ability to spread the word about your new business! After all, businesses need customers.
Especially when starting out, focus on creating as little competition as possible. United States president, Theodore Roosevelt said, "speak softly and carry a big stick; you will go far." Aside form the political connotation, this quote also holds great truths for a business. Seeking unnecessary competition is just asking for trouble.
So how do you find out who the competition is, and how to avoid them as much as possible? Do your research! Find out who the competition is, what they are doing, and how they are doing it. Your first thought should not be "How could I do it better", though there comes a time for this, rather your first thought should be "How could I do something similar that would not disturb them?". It's surprising, oftentimes businesses who might seem like a competitor actually end up helping their competition as well as their own business.
Capture the analysis of your competition in your business plan. Give anyone reading your business plan confidence in your business' survival even amongst the competition out there.
When you go to draw up a business plan think about how your business will be staffed. Think of what the day-to-day operations will look like. Create a detailed strategy for how your business will be managed, staffed, and ran. Create a plan for how your product/service will be manufactured (if it will be) and how your business will be able to ensure fulfillment to customers. If you have physical merchandise, how will you go about effective inventory? Thinking of all of this stuff now, will save you a lot of headache and time in the future.
This is the meat and potatoes of your business plan. After all, businesses need positive cash flow. When drawing up your business plan dive into the cash flow of your business. Create financial predictions, and break-even analysis. Don't willy-nilly this either.. This potentially will take more time than the rest of the business plan.
This is time well-spent. Anyone looking at this business plan of yours should believe that one day your business will be profitable, and they should know when that projected day is. Profitability happens at your break-even point. This is where the money your business has accrued is now greater than all costs to start the business, and all the upkeep costs of the business.
This forces you to make serious reflections on your business. This section should not only give others hope in the lasting survivability of your business, but it should fill you with belief in the success of this business you are creating.
After you have taken the time to draw up a business plan, consider sharing it with a few people close to you. See if they can point out any flaws. These flaws can be tweaked or fixed. To see example business plans and get inspiration for your own click here.
Catch you on the flip,
P.S. If you are wanting to, or have ever wanted to start a business, but are lost on where to start, click here and check this out