Have you always dreamed of owning and running a business? If you are bursting with entrepreneurial spirit that you can barely contain, and you can’t wait to get going, slow down for a second or two. You’ve got some prep work to do first.
After establishing what product or service you want to provide (also known as a business model), one of the basic steps you must take before launching a business is to create a business plan. Not only is it a typical requirement for obtaining a business license or a loan, it’s also a practical guide and outline that you can use to as a map to commercial success. Simply put, if the time has come to be your own boss, you need one; try including how many staff members you need and what you need to make your business efficient, e.g. a document management system. Here is what you need to include in your business plan.
Know Your Mission and Write it Down
The first part of a business plan should be an executive summary that includes a definitive mission statement, a declaration that tells the world what you business is and what it plans to do. The mission statement should use the classic ‘W’ rule — who, what, where, how, when. Describe your company, tell the world where it lives, what product or service it provides and to whom and when it will be available. In essence, this is your first impression to the business world. So, make it good and make it count.
Size Up Your Business Prospects
The next section of a business plan should be a market analysis, an assessment of your target audience that sizes up how profitable you may be will be within it. This portion involves a bit of research because you actually study your prospective market, determining its strengths and weaknesses. Doing this is a priceless opportunity to examine the commercial landscape and build your business from the best vantage point.
Time to Tell How (and What) You Sell
The next part of a business plan should discuss how you plan to sell your product or service. Otherwise known as a marketing strategy, this section should explain your sales technique, as well as what you’re selling. Anything from acquiring clientele to building relationships with future customers, how you will advertise your business, this segment should explain it all.
Who’s On the Team?
This portion of the business plan explains who the team players are and how operations will be divvied. If you are the lone wolf for a one-person show, there’s not much more to it than listing yourself as the sole operator. However, if this is a multi-player business venture, you will need to detail each position and who will be in charge of that division within the company.
Lay Out the Financials
If you are looking to secure loans to get your business up and running, you will need to have preliminary financial statements prepared. This gives potential lenders a chance to see if your commercial venture is worth the financial risk. The lower the risk, the more likely loan underwriters will be to give lenders permission to front the money. Even if you’re not in need of a start-up loan, it’s still a good idea to have financial statements prepared. Successful businesses are attractive to investors and it’s these types of relationships that help business grow. Although you’re in the first stage of your business, it is essential to prepare for the worst – you need to know how to spot any financial red flags.
Don’t Forget the Incidentals
Presentation isn’t everything, but it certainly can’t hurt. Your business plan should have a cover sheet, table of contents, appendix, as well as a professional binding to tie it all up. Remember, your business plan is your first, figurative handshake to the commercial world. It should be firm, solid and thorough.