If you want to start up your own business, there are a few things that are needed to ensure success and to get people to take your venture seriously. One of the most important things that should be done at the very beginning of your trek into entrepreneurship is to write a solid business plan.
If you’re only just starting out in business, you’re probably much too busy to think about the long-term future.
But part of building your business now is planning for when you want to call it a day. Every owner-managed business needs an exit and succession plan to pave the way for a smooth transfer of ownership so that one day you can reap the benefits of your hard work and investment while the enterprise you’ve established continues into the future.
A startup business plan is a document that outlines your new business’s goals and objectives and indicates how they are to be achieved. This plan is invaluable when it comes to attracting prospective partners and financial aid for your new business. A business plan can also be used to track the new business’s performance and compare it with your original goals.
While business plans can be formatted in a variety of ways to suit your particular business and personality, there are twelve basic components that should be included in a solid business plan. They include:
1. Objectives.
What size business will you be starting? How much money do you want to make and over what period of time? All of these questions should be answered in the initial planning phase and should be realistic.
2. Competition.
Many small businesses fail because there was not a market for their new product or service. Make sure this does not happen to you. Find out which needs are not being met by current providers, and target your business to fill those needs.
3. Cost.
Estimate the cost of assets needed for your business by pricing the necessary equipment and materials needed in the day to day operation of the business. The best way to do this is to contact individual suppliers and do a little comparison shopping. Then, compile a list that can be easily referred to as you complete the rest of your plan.
4. Personnel Requirements.
How many people will you employ? What types of qualifications will they possess? Having a solid idea of what you will require now, may prevent personnel problems in the future.
5. Pro forma income statement.
A pro forma income statement is an estimate of future sales and expenses. The information contained should be in line with the business objectives. If the numbers do not quite add up, you may need to cut expenses, raise revenues or change your objectives. If the numbers still do not look encouraging, a different type of business opportunity may be better suited to your needs.
6. Legal form.
Will your business be a sole proprietorship, a partnership, or a corporation? Research each and find the one that’s best for you.
7. Capital.
This can be the most time-consuming part of starting a business. While there are loans and grants available, most funds used to start up new businesses are provided by the business owner. If you do not have enough capital to start your business now, do not get discouraged. Keep saving while you look for other ways to raise the needed cash.
8. Pick your location.
Location, location, location is the key to success. Place your small business in areas of high traffic.
9. Bookkeeping.
Whether you are going to hire an accountant or keep the books yourself, now is the time to implement your bookkeeping system.
10. Advertising.
How will people learn about your new business? Which types of advertising will attract the most people to your door: internet or TV? Should you buy back links for your new blog or not? Remember, these are quite possibly the most important dollars that you will spend. Use them wisely.
11. Permits.
Make sure that you have all of the necessary permits and licenses to operate your new business. These permits may include vendor licenses, sales tax numbers or professional licenses. Each city, county, and state is different. Check with the local chamber of commerce to see what is required in your area.
12. Open your business!
After the doors to your business are opened, continually match your business’s performance with its objectives. If there are any discrepancies, changes may need to be made in order to align the two.
As you can see, not all of these steps can be completed at the same time. Start writing your plan by including information about how you hope to achieve each step, and follow up by revising your plan as each goal is realized.
The most important thing to remember is that a business plan is not a rigid set of marked accomplishments, but an outlined path to where you would like to end up. Your plan may take many twists and turns along the way.