Starting to write a business plan for most small business owners or entrepreneurs is like jumping into the deep end of the ocean without a life jacket. They have no idea what to do first, next or last. However, there is one truth about business plans for starting small businesses. You have to have one to be successful. If you are starting up a business, writing a business plan is the way to be successful in your venture.
Instead of jumping into a 50-page business planning document, the best course of action is to develop a quick internal document called a business action plan. This internal document will help guide you in your business development and set you on the right course in developing your formal business plan. Here are some steps in a typical action plan.
Know Your Business
At first glance, this sounds like a no-brainer. But, think a minute. It's not. You have to have a clear idea of the exact business you want to start before you can either start it or write a business plan about it. Are you starting a new traditional business selling one or two product lines? Are you an entrepreneur who has developed a great new invention and is seeking capital for selling and marketing that invention? Are you offering the public a service? Are you a professional blogger who thinks you can make money with your brand new blog and blogging ideas? The business action plans for these three potential businesses may look completely different.
The bottom line is, what value do you intend to offer your consumer? How do you intend to create value within your own company?
Are you starting a brick-and-mortar business? What type of customers do you expect to draw? If you are going to offer more than one product line, you will have different types of customers. Write down all your possible customer profiles. Will you have an online presence? Customers that are more technologically-savvy shop online.
How many customers are out there for your particular product or service? It may require some market research on your part. If you are in a particular industry, even if your company will not be a public company, you can at least find out how many customers are in the marketplace by looking at Standard and Poor's Industry Surveys.
If your business is online, Google has a number of tools that will help you determine the number of customers that frequent similar websites.
In your business action plan, no one expects you to have an exact figure for the amount of money you need to launch your business. Before you undertake any venture, however, you have to have an approximation. First, you want to estimate your startup costs. Then, you want to put together a business budget worksheet for your everyday operations.
How much money will you need to live while you launch your new business? Most people estimate 12 months of living expenses. You need to ask yourself whether you want to continue to work your day job while you get your business off the ground, save up in advance of starting your business, take out a home equity loan, or borrow from family and friends?
When you launch a business, you need to have some sort of idea of your goals for the future. What are your goals for your business 6 months after launch? What about one year after launch? Have you thought about the long-term? Five years from now? How big do you want to grow? You might start out by looking at the SMART goal setting strategy as an initial step in establishing your business goals.
Build this business action plan before embarking upon some 15-50 page business plan and it will make that planning document much easier to conquer, and it will make much more sense to you.