Business Plan Basics
If you are a small business you may want to consider having a business plan. This will not only promote your business to others but also gain clarity as to what your business actually does.
According to one study, about 71% of the fastest-growing businesses have a business plan in place. This means nearly a third of them do not have one in place.
What I have found out is that when you create a business plan BEFORE you start a business could help you determine if the business that you are building is actually going to be viable. This means you are actually doing your research to determine if your business actually has a market.
In my humble opinion, one of the main reasons so many businesses fail in the first five years – 50% of them actually fail – is that the business owner never did the proper research to see if there was a demand for what they were wanting to provide.
If you are thinking of starting a new business – or you have one already – then you should do the research and create your own business plan. This does not have to be as hard as you think it will be. This is not a dissertation for a Ph.D. or even a thesis for a Master’s degree.
Creating a business plan can be done with just a few hours of effort and some guidance along the way.
Let us talk about what goes into a business plan by stating what are the different components of a business plan.
There are 7 components in a business plan. These 7 components can be broken down into smaller aspects that I will share with you how you can do all of that.
The first component of a business plan is the Executive Summary. This is a preview of the entire business plan. It is actually the first item anyone looking at your plan will review. However, since this is a summary it will be the last component that you will create. Think of it like a preview to a movie. It will capture the reader’s interest and show some of the good parts in the plan before reading that part of the plan.
The second and third components are the Company Description and Business Description. Each of those will go more into detail about who you are, what you do, and how you do it.
The fourth component is the Market Analysis. This is where you go into detail about the market and how are you going to be solving that problem.
The fifth component is the Operating Plan. This is how your day-to-day function is detailed. This is how you are conducting your business and how you solve the problems your clients have.
The sixth component is the Marketing and Sales Plan. This is a two-parter. The marketing plan component is how you attract potential customers into your business and the sales plan is how you convert them into paying customers.
The seventh and last component is the actual numbers part and is called the Financial Plan. This is where you go over your current or your numbers to start a business and all of the other costs of doing business. You will also project those values out for the first few years, including your anticipated growth and the costs with that growth.
Just for You
I have recently completed a course called Writing Effective Business Plans where you can go through all of those steps plus have a series of exercises to help jog your mind so that you can create your very own business plan for your business. This is designed so that you can create a business plan so that you can grow your business. This will be done by either finding external funding or attracting new business partners.
I suggest this course for you so that you can beat the statistics of why so many businesses fail. You and your business are worth the investment.