All businesses, big or small, in order to achieve success, must have a proper business plan. What is a business plan? It is a written document that helps you envisage the shape your business will take depending on the service or product you plan to sell. It involves a complete planning of working capital, business strategy, target market, employee costs and other factors involved in running of a business and putting it down in writing on paper. It should be realistic and should help your business to generate profits if followed with commitment.
The following tips will guide you in writing a good business plan.
1. Choose a Plan suited to your goals.
Standard formats are available to refer to for making a business plan. But you must make changes in its content to adjust to suit the purpose of your business idea. If you are planning to get funding from venture capitalists, then you will have to include information about your management. Financial information is important to banks before sanctioning loans to business houses.
Identify your target customers. It is important to identify the age group of consumers you plan to sell to and their income, lifestyle and location. For example. in case your buyers are going to be business owners, then write down in your plan the kind of industry you are going to sell to. It will be worthwhile to spend time to understand the behavior patterns of your target customers either through interviews or online tools available for market research.
3. Marketing Plan.
After identifying whom you want to sell to, the next step is to plan how you are going to reach them. You must write down what concrete steps you plan to take to let your potential customers know about you. From using Facebook ads to direct mailing and brochures, many marketing strategies are available to choose from. A prudent way to decide which tool to use would be to study what other entrepreneurs in similar industry are doing to connect with customers and follow same tactics.
4. Business Goals.
You must have a clear picture about where you see your business in the next five years. Identify your growth whether you want to see your business expand in terms of expanded hiring or increased revenues. You must clearly state in your business plan what milestones you are hoping to reach in the next five years.
Your business plan must clearly state where do you want your business to operate from in the coming years. Whether you want to remain a local business or do you want to see it expand to other cities, regions and countries. Taking this decision in advance will give you a clear picture whether you might need to open offices in multiple cities in order to sell your services and products there. This will also involve business travel on a regular basis.
If you plan to approach investors for money or apply for business loan using your business plan, it has to be a very detailed one. It should clearly state the amount of money required and how it is going to be allocated among various aspects of your business. Your plan must clearly state the repayment policy and in case of investors providing the money, what return they can expect on their investment. A business plan stating all of the above becomes absolute must for a C Corporation wanting to attract venture capital or you want to issue shares to the public to raise capital. Raising finance is time consuming and complicated task and you will have to give control of some part of your business to investors.
The day to day running of the business requires careful planning. You need to lay down in your business plan the terms and conditions you will work on with your vendors and suppliers. Planning is required about hiring or buying retail space, storage spaces and business office. You should have a clear plan of what you plan to buy and what you plan to rent. Operation procedures also involve logistics and shipping –movement of goods from warehouse to the buyer.
8. Hiring Employees.
Another very important aspect of business planning is hiring of employees. You need to have a clear plan about the number of employees you want to hire in the first year and their role in the organization should be clearly defined. Write down in your business plan the aspects of your business that you want to take on yourself and the ones for which you want to employ people. Sometimes you may not be ready to spend on full time employees, you may employ freelancers or contactors who work independently till you scale up your business.
9. Choose and register the name of your business.
Choosing a business name is a very crucial aspect to the success of your business as it creates an image in customer’s mind. Before finalizing your business name and writing it down in your business plan do some footwork. Talk to people about your venture and suggest three to four names that you have in your mind, and study their reactions to each one of them. The name must project an accurate image of your business. Once you have finalized the name then it is important to get it registered.
10. Lifestyle Design.
Finally, you may have written down a good business plan but remember your business plan is going to impact your life goals too. So make sure that your business plan supports your lifestyle. This means giving thought to the number of hours you want to put in everyday and the number of days you would want to keep for vacation in a year and so on.
To conclude don’t rush to start a venture. Carefully think out a business plan that will help you foresee important issues and challenges that you might encounter on your way to setting up a venture. Learn more about how to start a business visit this business blog.