Are you one of those people who dream of owning their own business?
Having financial independence, stability, or being your own boss?
Planning is Key in order to start and be successful!
According to the Merriam-Webster dictionary, an entrepreneur is a one who organizes, manages and assumes the risks of a business. By owning a business you take on risk expecting a positive reward, you are responsible for the risks and outcomes incurred by your business.
And that's the point, you are responsible.
Can you imagine the feeling you could get from starting your own business and actually having a positive experience. Think about all those risks you've taken and think about the feeling you had when the outcome was an amazing one!
Don't get me wrong, there are no guarantees in life, BUT, you can minimize your risks by having a business plan.
A business plan is not only used to secure financing but also as a road map for your business. It tells you where you need to go and how to get there. With a well thought out plan, you can have a better chance of success.
As a business plan developer I see a lot of business ideas with little or no foundation. People have passions and ideas, they want these ideas to turn into the next Uber or the next a million dollar business without doing the proper research.
The best way to start a business is by doing your research, in order to create a tangible foundation.
Every year businesses fail due to improper planning, usually they do not:
know who their competition is
understand their market
or don't have realistic finances.
So where do you start? Well it's simple, start by writing a business plan, or better yet hire someone to write one for you.
WHY? Because when it comes time to do your taxes, do you do it yourself or hire a professional? Well, you can save some money and do it yourself and run the risk of doing it wrong and possibly getting audited, or you can hire a professional.
The same goes for a business plan. If you hire a professional to write it for you, you will have the confidence that they know what they are doing and will do a good job.
So what does a business plan do? Well, it allows you to see where you are going as a business/road map to success and helps you get the financing you need to properly run your business.
Road Map to Success
Planning is key!
Writing down necessary and applicable information helps you make good decisions and helps you reach your goals.
Personally, if I don't write down what I need to do, by when, how, or have the necessary information to make qualitative decisions, I begin to make bad choices and usually don't reach my goals. Take losing weight, in order to lose weight and get fit and healthy you have to know what you are doing, so you research the best exercises the best meal plans and diets and you set dates and goals. by doing this you have a plan of action a road map to success!
So I say again, planning is key.
You need a business plan. There are several sections to a business plan. I have seen some with 4 main sections and others with 9. But the main parts a business plan are:
The Executive Summary. Which should only be one to two (max) pages long. It is a summary and it needs to capture your readers interest. This is probably the section that will make or break your business plan. If somebody is reading this section and is not entice by it, they are not gonna finish reading your plan. This section is more for others than for you.
The industry and Market Research. This information is key when considering the industry you are entering. Is it a growing industry? How is the competition? Are people actually buying the products/services in this industry? What about the market, who will be your customers? Are they buying? Is the market conducive to to your product/service? How will you reach your customers? Who are your competitors? What are they doing right? What are they not doing? How can you exploit their weaknesses? So many things you can find out by having this information. Vital information that can give you a better understanding of where you are going and can help you evaluate your business.
Operational Plan. This section explains how the work will be done, who will be managing the day-to-day, how it gets done, where you'll be located, basically everything having to do with the operations of your business.
Financials. This is a huge part of the business plan because it can give you a realistic number on how much you need for funding, when you can realistically break-even, start making a profit, etc. In many cases you won't have a financial history for reference so you'll need to have financial statements based on projections which come from the industry. You need to get these numbers as accurate as possible to know how much you will need to have a positive cashflow. Not to mention the fact that you need these numbers to show lenders and investors.
All this information will help you assess your business. By covering this in the writing stage will save you time and a lot of money. You could always find this out on the fly when you've already started your business. But do you really want to risk it?
It's better to spend a couple thousand in this stage then lose thousands in the next.
Get the Financing You Need
I always see articles on why you don't need a business plan. This, in my honest opinion, is stupid. A business plan is needed for all the reasons above and because lenders and investors expect it!
If you are going to go to a bank to ask for a business loan they are going to ask you for your business plan. They want to see that you are prepared and you did your planning. And they also want to make sure they are going to get their money back. This is the case with investors and lenders.
What would you need financing for?
Well, maybe you don't have $50, $100, or $250 thousand dollars on hand to start or grow your business, so you need financing. And there are different types of financing you can get, I'll have another blog for that topic. But basically if you are going to open a coffee shop you'll need money for a lease, equipment, inventory and working capital.
If you already own a coffee shop and would like to open a second location, you can get an SBA loan, for example, to cover the equipment for the new location.
In order to get that financing you need to show the lender your business plan!
Don't make the same mistakes people have made by not planning ahead. When it comes down to it, wouldn't you rather know what you're getting into now before risking hundreds and thousands of dollars later? The best way to do that is with a business plan.
Do you already have a business plan? If you could get $150,000 loan what would you use it for?
If you need help with your business plan, contact me and I can help you with your business plan!