The entrepreneur is someone who will work 80 hours a week to avoid working 40. When starting a new business, it can sometime seem that you have to be a jack-of-all-trades, but implicitly, a master of none. The work has to get done one way or another. Most all entrepreneurs I’ve met realize that sacrificing the vacations or nights out in the short term will result in an abundance of choices in the future. Translating your vision into reality requires several steps and steady progress.
Entrepreneurship is an exciting journey but starting a new business can seem overwhelming – especially when you’re doing it alone. Even with an abundance of information, it is hard to know what you don’t know. Indeed, attempts to find quality information might seem as if you were dropped off 300 miles from civilization with no communications. Good thing you can start alleviating the confusion with a business plan. Creating a business plan helps you to refine incomplete ideas, identify areas you may have not yet considered, create a map so you know what to do next, and increase credibility for bank loans or investor funding.
While you may think you’ve got your business concept down pat, turning the idea you wrote down on a napkin (or the back of an envelope) into reality isn’t as easy as it might appear. Many entrepreneurs get so caught up on how to start the process that the business itself never materializes. To simplify things, here is a list of 8 fundamental things to plan when starting your new business.
1. Executive Summary. Capture your reader’s interest immediately. What makes your business worth reading about? An executive summary is a brief snapshot of your business plan as a whole and touches on your company’s profile and goals. You must describe why your company is unique and qualifies to succeed in the market. Are you the first in the market? Do you have any patents? Have you built the better mousetrap?
Quick Tip: End at the beginning. This part is easier to write after you have finalized all the details of your plan. Once you finish your plan, go back to the beginning and write out the summary.
2. Company Description. This is where you get down to business. As the backbone of your business plan, the company description provides information on what you do, what differentiates your business from others, and the markets your business serves. You should define your service offerings, the history of your field, objectives and any other elements that may add to your success and the ownership of your company. Don’t forget to include how your company was formed, the type of entity, and all key milestones to date as previous achievements can be an indicator for future success.
3. Market Analysis. Before launching your business, it is essential for you to research the industry, market, and competitors. Is your market oversaturated or open to penetration? Both types present opportunities for success if correctly planned. Provide a Market Overview where you can discuss the characteristics of your market. Customer analysis should be a part of your research. Defining your target customer and their needs is crucial. Many times, you may think you know who your target customer is but are they the one doing the buying? Now, let’s talk about competition. Understand who your direct competitors are. Who is filling the same need you will be filling? What’s working and what’s not working for your competitors? How will you distinguish yourself?
4. Organization & Management. Every business is structured differently, so it’s important to understand how your company will be organized and managed. What entity will you use? Who’s in charge of what, when? What kind of business succession plan needs to be put in place? How will you operate? Where will you be located? What are your expenses? Do you have a trusted advisory team?
Quick Tip:the more systems you implement and use, the faster the road to success.
5. Service or Product Line. Every business has a product or a service. Use this area to speak about what you are selling and tell the compelling story about your product or service. Describe what you sell and how it will benefit your potential customers. Make sure you can make your product or service stand out. What makes it unique? What makes YOU unique?
6. Marketing & Sales. Often overlooked, marketing is the bloodline of your company. Marketing is everywhere - on social media, flyers, business cards, your website. Good marketing may consume a significant part of your budget, especially in the beginning. Your personal brand shows clients who you are, so make sure to make an impact. Use this section to strategize and decide the best ways to reach your target market. Think about your store design, website design, and branding to describe how you plan to market your business and explain your general sales strategy. While you’re at it, can you define your avatar (ideal) client?
7. Funding Request. If you are seeking funding for your business, make sure to include everything you are asking for in the plan. It is also important to note the amount you are asking for as well as how those funds will be used. Any omissions may put your request at the bottom of the pile, or worse yet, in the garbage can. If you’re looking for an equity investor, it’s not the best idea to write a line item for a six-figure first year salary. [Yes, I actually saw a business plan that had this.]
8. Financial Projections. Providing financial projections to back up your funding request is critical. Find out what information you need to include in your financial projections for the bank or angel investor. It is crucial to provide the requested financial records.
It’s ok if you might not know the answers to all these questions. We can help you to refine your goals, map out your plan, and provide the kinds of details needed to make your venture a success. The important point here is that you’re willing to go through the process and the hard work to make your business successful.
Are You Prepared to Include the “Wow” Factor?
You may think your business plan is great; but don’t forget that most people think the same of their own business. The Wow Factor becomes especially important when you’re all competing for funding.
Make sure your plan has a “Wow” factor by:
- Explaining why your business is unique;
- Show how your product or service outpaces your competitors (patents, experiences, relationships, etc.); and
- Defining how your business caters to a unique niche in the market, which areas are being ignored and what potential opportunities exist for your business going forward.
You want to your business plan to stand out from the rest – be organized and unique. Even if you don’t need outside funding, complete the business plan to get a roadmap and ensure you haven’t missed one of the basics.
Let’s Continue This Conversation
If you’re not used to drafting business plans, the task may feel daunting and you may be tempted to jump ahead. Don’t. We’re happy to think through a strong business plan and make sure you have protections in place so that your business gets off to the right start. And, even if you’re already knee deep in your business, we’ll help you get all of your financial ducks in a row. Give us a call or visit us online to get on our calendar.
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