Creating Your Business Plan
Developing a business plan is one of the most important tasks any new business owner will undertake. A business plan is the primary document used to determine if a business is viable, develop plans to mitigate potential risks, and track the progress of the business over time. Along with helping support decisions related to the business, a well-written plan can articulate the viability of the proposed business on paper and define the financial commitments of all involved. In short, a successful business plan will be the roadmap your business will use to reach its goals.
Understand Your Vision
Before you begin putting together your business plan, it’s important to have a clear understanding of your vision and goals. What are you hoping to achieve by starting this business? How does your vision align with your values and purpose for this new endeavor?
Your business plan should provide the answer to your questions and offer detail on the timeline for achieving your goals. Additionally, consider which sectors, both public and private, you may be allying with. These alliances will play a role in ensuring that you have access to the expertise and resources necessary to bring your vision and plan to life.
Define Your Business Model
The next step in creating your business plan is developing a business model. This will include a definition of the products or services you plan to offer, means of distribution, pricing, manufacturing if applicable and marketing. Additionally, consider if there are any potential legal or copyright requirements that should be accounted for in the plan.
The model should also address any potential risks the business may be facing. This could include the availability of direct or indirect competition, trends in the sector, and any potential regulation changes. By strategizing appropriate risk management measures such as conducting thorough market research and effectively pricing products and services, it’s possible to mitigate a significant portion of associated risks.
Outline Your Market Plan
Creating a successful market plan is integral for small businesses committed to growth. This plan should include your target customer base, an assessment of the industry dynamics, a review of your competition, and a detailed account of the marketing channels and activities you plan to execute.
Your plan should include a budget for marketing materials, such as websites and brochures, as well as for any type of advertising you plan to implement. A good way to start creating your marketing plan is to review your competition and determine how you can do what they do better or differently. Building an effective marketing plan will be integral for the success of the business and should be incorporated into the business plan.
Determine Your Operational Plan
The operational plan of your business plan should include a detailed description of the day-to-day running of the business. This should include details of any employees that may be required, job descriptions, operating costs, the process for finding and selecting vendors for materials, and a description of any equipment and facilities necessary for the operation.
Additionally, consider any laws, regulations, or industry standards that should be accounted for. If you need to obtain any licenses or permits, account for the associated costs in your operational plan. Accounting for such issues in the planning stages will prevent potential delays as the business begins to take shape.
Set Financial Goals
In the financial section of the business plan, determine if you require any external funding and provide clear details of the required funds. The financial plan should include income forecasts, a balance sheet, cash flow projections, and a break-even analysis. This section should also set out the goals you have for achieving the desired financial position of the business.
This plan should also consider potential sources of financing such as angel investors, grants, venture capitalists, and banks. Nonetheless, any associated fees and costs with using external funds should be factored into the financial forecasts.
Review and Revise
Due to the dynamic nature of business, it’s important to review and revise your business plan on a regular basis. Offer criteria for regular and consistent analysis of the plan based on current market conditions and industry trends. Moreover, try to anticipate key or potential risks and address them accordingly.
Having an effective review process in place and revising the plan in response to changing environments is the key to making and adjusting plans to ensure successful and sustained growth.
Creating a strong and comprehensive business plan is the foundation for any successful business venture. With a well-formed plan, you will have written out your vision, developed a working model, outlined a market plan, built an operational plan, and achieved your financial goals. Additionally, by regularly reassessing and revising the plan, you can make the necessary adjustments to ensure your business remains profitable and ahead of the competition.
