The first step to starting anything is a plan. Whether it is a trip across the state or life's journey, a plan is needed. Without one you will get lost. The same holds true when you start a business. Why is a business plan important? It is the blue print of your business. Every aspect of your business should be written out so you can follow it. Many people believe that business plans are for investors and lenders. The truth is that the business plan is for you. It is your vision, your map. Investors and lenders want your business plan so they can see your vision and make a sound business decision based on what the map of your vision shows them.
A good business plan has several key elements. The first and probably most important part is your vision. This is explained in the executive summary. Describe your business. What are your products? Why are your products so special? Who are your customers and why will they buy from you? Discuss the future of your business. What do you want your future to look like?
You have your product or services. You have a good idea who your customers are. You now need to know how you plan on connecting your products or services to your customers. This is where the marketing plan comes in. It is very important to be clear about how you plan reaching your customers. If you do not get this right, how do you expect to be successful? Give this part 100% of your attention and effort. I guarantee if you do not properly invest the time and necessary money to create your marketing plan and use it you will suffer. No customers equals no money.
Without risk there is little no reward. When you are gambling that may be true. When you are in business, you are not gambling so the risks to your venture should be assessed early. The risks you take should be understood and a plan should be devised to mitigate them. Your risks and how you plan to work through them should be outlined in detail in your plan. If you are realistic, then you should be able to start your business with little to no risk. There are obviously risks that can not be completely planned away. Know what they are and enter your venture with those risks in mind. Knowledge and planning are your best chance at keeping your risks from destroying your business.
What is next? You guessed it …. Money. This is not the money you are borrowing. This is a discussion on how money flows through your business or the cash flow. What is in your budget? You need to figure out startup costs, regular expenses, pricing, cash flow analysis, and profit analysis. You need to know how much money you can expect making and you need to know realistically how much you need to get your business off the ground. If you are starting your business from scratch, you will need to forecast. Be realistic and conservative. If you are over zealous, it will only hurt you in the end.
Your plan is for you. Use it to begin and use it to grow. Dedicate serious time and effort to your business plan. If you need investors or you need to go to a traditional lender your efforts will not go unnoticed. Your investment into putting together a sound document will take you far in your business. If raising money is your primary focus, you need to understand that no matter how much time you put into your plan, some people may not see your vision. Others will but will want to make changes to suit their risk tolerance. Listen to what they have to say. Do not take it personal it is business. Their suggestions could help you make a better document.