Monday, May 25, 2015

Write a Small Business Plan - 8 Questions to Evaluate Your Business Opportunity

One of the biggest myths of entrepreneurship is that there is a one-size-fits-all structure for writing a business plan. Business plan books and software may provide you with a formalized structure, but it's up to you to make heads-or-tails of which of those aspects apply to your business. Do you need to fill out all of the details? What if you don't know the answers or if many sections don't seem to apply to your business?
Business Planning Fundamentals

If you aren't looking for investors or funding, consider writing up an informal business plan and modifying it as you go. When you first start out, you will need to do some planning to evaluate whether you have a solid business ideal that will become profitable in the near future. Some of the questions to ask include:
  • Is there a market for your products and services?
  • Which types of customers and clients are most likely to buy what your company offers?
  • How will you differentiate your company from your competitors? Why should prospects do business with you over all other options out there?
  • How much revenue can you bring in next month, in six months, in a year?
  • What are your startup costs? What are your initial monthly expenses?
  • Do you have or can you get the appropriate resources (money, technology, equipment, expertise) to start your business?
  • Will you need to hire partners, employees, vendors, or contractors to help you? What will their job functions be?
  • Who will be responsible for day-to-day business tasks?
Why You Need a Written Business Plan
If you are starting a sole proprietorship, initially, you will handle everything yourself. It's up to you to keep track of all the details, deadlines, and financials so your company can thrive, so having a written business plan that includes each of those sections can help you keep everything organized.
If you find yourself saying, "But I'm too busy getting things done to plan," then it's time to put some time aside to sit down and create a plan. If you are always putting out day-to-day fires and dealing with emergencies, you can easily lose focus on the big picture - where you want your company to be long-term. A plan will keep you moving in the right direction, help you focus on the most important tasks that make the biggest impact on your business, and get you to your destination much faster.
As your business grows and evolves, things can become more complicated. If you hire employees or need to apply for a business loan, you will need to share your business information with outsiders who don't know the company as well as you do. At that point, you may find it helpful to create a more formal document that anyone can pick up and understand what your company does and how well it is doing. You will probably need to expand your business plan to include information such as an analysis of the market, industry and your financial projections and descriptions of your company, management team, and operation logistics.
However, don't fall into the mindset that you need a completed, formal business plan before you start your business. The only time a business plan is complete is when the company is dead. Your business plan should be a living document that grows with you, so start with what you need and build it out as you need it.
Looking for ways to market your small business? Download your free marketing plan for small-business owners today. This hands-on workbook covers the 6 steps for creating your marketing strategy and includes a fill-in-the-blank marketing plan template you can use to craft your monthly marketing plan.
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