If you're interested in starting a business, you will need to write a solid business plan. This plan has two main purposes. If external financing is needed, it helps attract investors or obtain a bank loan. It also serves as a road map from start-up through the life of your business. It helps you stay focused on the goals you set initially and can be modified to adapt to future changes in the industry.
There are certain items that you will need to consider to begin creating a successful business plan.
Providing Real Timely Information
A good business plan should be based on current data. It should include specific information about your company, as well as other details such as industry outlook, target audience, services and products, marketing strategy, and funding.
However, before you begin writing your business plan you will need to gather information to help you identify priorities and make decisions. This may include research on target demographics, the market, and potential competitors.
The Small Business Administration provides guidance and templates for writing both a traditional and lean startup business plan.
Creating an Action-Based Business Plan
To determine your company's goals, start by looking at the SMART goal-setting strategy. SMART can guide you in creating goals that are specific, measurable, achievable, relevant, and time-based. Note that goals are not set in stone and may need to be modified to meet changing customer needs.
Make sure your business plan is clear and to the point. Avoid using industry jargon and acronyms, so it is understandable to those unfamiliar with the industry.
Identifying Risks and Challenges
Successful business planning involves not only assessing potential risks but coming up with ways to mitigate them. One strategy is to create a risk management plan. This helps prepare a company for dealing with various risks before they cause serious financial loss.
Types of common business risks include fines and penalties from noncompliance, lost revenue and profits, and loss of reputation.
Business Planning and Ethics
There are many types of strategies to increase your business’s profits, however, some may be unethical—or even illegal. Before you make them part of your business plan, consider if they are ethical. In other words, do they support or enhance your values and the values that you hope are shared by society?
To avoid any legal liability, be sure to understand the customs and regulations applicable to your business.
Adopting unethical practices comes with the risk of being caught. It can cost you in expensive fines and penalties, as well as your reputation in the industry. This can result in the ultimate cost of losing your business.
Business planning is critical if you want your business to survive and succeed. It is not only a tool for attracting investors or getting a loan but serves as a plan that can guide you through the life of your business. By creating a realistic, actionable business plan, you have taken the first step to becoming a successful business owner.