Are you planning to start a new business? Or are you considering expanding your current business and require a bank loan or investment from outsiders?
If you are going to look for an investment of capital it is quite likely that you will be required to have a business plan. If you are starting a business, despite the work involved, a business plan can prepare you for the obstacles ahead and help ensure your success.
A business plan is something that many small businesses fail to create, however, many business owners are adamant that having a written business plan is one of the keys to their present success. Creating a business plan forces you to contemplate possible obstacles to your business and prepares you to find solutions that will help you to overcome them.
To find investors or get a bank loan, they will want to see that you have the experience or resources to run the business. They will want to see your projected income as well as your suggested repayment plan already laid out. Taking the time to do this is not only important for them, but it gives you a measuring tool to verify if your business is growing properly. You can gage your success on how close to the plan your business has actually performed. Perhaps you’ll do worse, or perhaps you’ll do better, either way it helps you determine how well your business is getting on.
If you have never seen a business plan before you may be concerned that is is too difficult a proposition for you to manage on your own.
While there are services available where you can hire someone to write a business plan for you, depending on your needs it may be wise to familiarize yourself with a business plan’s layout. This will not only help you to provide the necessary information, but may encourage you to try your own hand at it.
There’s a free tool at www.bdc.ca which will assist you in creating a business plan. Some of the topics you will be required to explain are your Market, Customer, Competition, Marketing Plan, Research & Development along with financial forecasts. You may consider hiring someone to help you with your financial sheets after completing the written part of the Business Plan.
Your Business Plan will become your guide and silent business partner – indicating where you need to improve and helping you stay one step ahead of your competition. Make it a priority to have this crucial road map for your business.
Use this comprehensive checklist to plan each step of your new business and transform your dream of entrepreneurship into reality. These steps may not necessarily be completed in the order listed; however, you can use them as a guideline for completing all of the necessary business startup tasks. – Determine what kind of business you want to start. – Learn about the industry for your business. – Analyze the market for your business. – Study your competition. – Educate yourself on running a business. – Join trade associations. – Name your business. – Perform a trademark search. – Register a domain name. – Design a website. – Obtain a logo. – Determine business structure (sole proprietor, partnership, or corporation). – Evaluate your personal budget. – Write a business plan. – Write a marketing plan. – Locate financing. – Create a list of start-up supplies with budget. – Set up a system for accounting and payroll. – Apply for business license, fed tax ID, fictitious business name. – Select a location and set up shop. – Order signage. – Obtain business tools (computer, printer, fax, postage, office supplies, and fixtures). – Order business stationery (business cards, letterhead, brochures). – Obtain inventory. – Create an operations and employee manual. – Hire employees. – Set a launch date. – Plan a grand opening event. – Send announcements to everyone you know. – Send press releases. – Turn on the OPEN sign! – Revisit your business plan and update often. – Evaluate your marketing strategy often. – Prepare a realistic business plan. Think of this as your business road map. Define exactly where you want to get to with your business and then you can effectively map out your path towards achieving your goals! By creating a detailed business plan you should cover all options and eventualities and have a clear future vision that will guide you through the rest of the start-up processes. – Your business plan should encompass the financial considerations of starting your small or home based business:- Do you have the capital required? Do you need to raise additional funds? Who are you going to approach for finance? Who do you trust for advice? And don’t forget to open a business bank account… – Consider the legal implications of becoming a business owner and proprietor. Are you better off as a sole trader, a limited company or are you considering a partnership? Make sure you consider all the angles and protect yourself and your assets personally from the outset. Anything you bring to the business has to be itemized, valued…even if you’re a sole trader. And make sure you are professionally covered with the appropriate business indemnity insurances. – Get your family and friends behind you from the get-go. Make sure your family and friends are fully understanding and supportive of your ideas to venture into small business start-up. Do they understand the level of commitment you will have to show for on-going and long term success? Their belief in you and continued support of you will work wonders towards your on-going success, so don’t forget to look out for them too. – Protect your family, protect your business. If, God forbid, something were to happen to your health, how would your business survive, how would your family cope? Consider insurances – from health, critical illness and income protection insurance to life insurance – and consider your pension and long term financial security. – Face those ‘taxing’ questions from the start. Your small or home based business has to consider its taxation situation. Do you need to register your business for sales tax purposes; have you informed your tax office of your business’s inauguration? Do you have a good tax professional lined up to guide and assist you? The bottom line when it comes to taxation is that from the outset you need to make sure your papers and books are in order, this will save you time, money and heart ache in the long run. – Prepare realistic and achievable goals and targets for your first year. Do not expect to conquer the world with your first year’s business returns. Starting a business is a life changing undertaking and one you must be patient with. The rewards are there, but make sure you set yourself achievable targets – when you reach them they will give you the confidence and satisfaction to set new goals and to continue building your business’ success.
Ok… so you’ve finally reached that stage in the development of your home business to get started. You’ve done the research, you have a game plan and you’re ready to go except for one small detail… you need money. Whether it comes from a loan or from investors it doesn’t matter but you need a good dose of seed money to put all your hard work and planning into action. However, regardless of who hears your money pitch before they give you a dime they will want see your business plan.
Business Plan – What Is It?
A good way to think of a business plan is that’s it’s a document that provide answers to the type of questions anyone who may provide financing would like to know about your home business. You will not get outside funding without one, because the people giving you the funding will insist on one because it helps them to know that you’ve thought through what you’re proposing to do. A business plan says to them… “I’ve considered this from every angle, and here’s what I’ve come up with”.
Business Plan – What Does It Include?
What is your product or service? This is the first question every business plan should answer. You must explain in the clear, concise language what in the world you plan to produce or what service you plan to provide. You will also want to include why you’ve chosen this particular product or service.
Who are Your Customers? After you’ve explained your product or service, the next step is to identify who you plan to sell your product or service too and why. The demographics (age, sex, language, country, state or city, income, etc.) You need to clearly identify your customers in order to properly target your advertising, packaging, pricing, et.
What Makes You Different? You need to identify the “primary factors” that will make your business different than other businesses you’ll be competing with. What niche are you filling that they are not or what do you plan to do to fill a particular void in the market that you’ve identified?
What are Your Expenses? Your start-up expenses include any equipment that you need before you can get up-and-running, while your day-to-day expenses are staff costs and supplies.
Following is a Simplified Example of Business Plan
This a a simplified and shortened version of a business plan. In the real world… each one of the following sections would be 1 – 2 pages in length. That being said… in most instances it’s better to be as brief as possible. Only add information if your potential backers request it. It’s a bad idea to go into too much detail in your plan. You’re not trying to explain everything down to the nth detail, just the basics of the business and why they should give you the money you need to launch it. And always focus on profit.
Nature of Business: The business will be a home-based catering company, producing luxury food for special occasions such as birthdays and weddings. We will provide a comprehensive catering service, while specializing in high end customized cakes, which have a higher profit margin than other foods.
Target Market: Our catering business will be aimed at middle-class customers who desire a top-of-the-line catering but must operate on a budget. Our initial market area will consist of Mytown and the affluent area of Theretown.
Key Factors: We will only use commerical grade ingredients purchased from wholesalers and provide top quality design and service. This will allow us to provide food that looks tastes great, while keeping costs as low as possible.
Expenses: Beause I will be using my kitchen and making the food myself, there are only two real expenses: The purchase of an industrial grade mixer and then the day-to-day cost of supplies. I’ve attached a suppliers’ letter listing prices. Our research has shown that this supplier offers the best value for start-ups.
To wrap it up, you should include a breakdown of both projected profit and loss per month (in graph form)for the first year in business. Show one-time and day-to-day expenses versus projected profit to indicate how you will pay-off your loan. Your business plan should show you making enough of a profit each month to live on – if it doesn’t, then it may be considered unfeasible.
Study a Few Real-World Business Plans
The best way to get a real a feel for the dos and do nots of a business plans is to find real-world plans that have already been approved and study them. A good place to start is the internet. Once you’ve studied a few, you will get a better feel for how much work will be involved in putting your business plan together. Remember, until your business exists for real, the business plan is the only tool you have to sell prospective backers on how great your business is going to be
Advertising doesn’t have to wipe out your bank account to be effective. When you learn to negotiate, know when smaller ads are as effective as large ads, ask for discounts, and create an irresistible offer, you’re on your way to skyrocketing profit margins!
1. Negotiate Have you noticed that some people seem to always get the best deals? Yeah, you pay full price and think you did OK until they show up with the same thing, only they paid several hundred dollars less. It really get your goat! How do they do it? They’re not afraid to ask for an extra discount.
Yep, don’t sell yourself short because you didn’t ASK the next time your advertising rep makes an appearance! Even if you’re already getting a discount, ask for a bigger one. You have not…because you ask not.
2. Trim Bigger is always better…or is it? When it comes to advertising, don’t be surprised if some of your short ads meet with more success than larger more expensive ads. Trimming down on the size and cost of advertising doesn’t mean you’ll be trimming the results!
3. Exploit the Freebies What’s the difference between advertising and publicity? …who’s doing the talking. Yeah, when you sell yourself, it’s advertising. When someone else is selling you, it’s publicity…and it generates credibility and interest that you don’t want to miss out on.
Think about the different ways you can get your business in the spotlight. Do you have some news… write a press release? Write some “how to” articles with a short byline at the end and release them to ezines, magazines, newspapers, and other publishers. Why not promote the product of a non-competitor in return for them promoting yours…think of the totally different market they affect!
Yep, there are a lot of ways out there to get free advertisement that will benefit your business. Of course you won’t be able to rely solely on the freebies, but hey, you can get a little extra for nothing!
4. Improve Your Offer Is your deal too good to pass up? If not, you need to improve it. Hey, I’m not talking about cutting prices even more…you’ve still got to make a profit. You can make the deal sweeter just by increasing the readers knowledge of the value of the product, or adding bonuses that are perceived as valuable, but cost you little.
Motivate buyers with expirations. Yeah, an open ended offer encourages procrastination…which leads …yep, nowhere. When the customer knows he has until Saturday to purchase an item he’ll pay more for on Sunday, he’ll make it a priority to head for your shop. Advertising doesn’t have to wipe out your bank account to be effective. When you learn to negotiate, know when smaller ads are as effective as large ads, ask for discounts, and create an irresistible offer, you’re on your way to skyrocketing profit margins!
ABOUT THE AUTHOR
Who is Allyn Cutts, and why should you care? Allyn has spent over 24 years helping businesses like yours find new customers and increase sales to current customers. Allyn is a marketing and sales fanatic, providing measurable marketing solutions that drive huge results for small-to mid-size business clients. Allyn works personally with clients to design and deliver off-line and on-line direct marketing strategies that focus on metrics and measurable results. You can learn more about Allyn Cutts at www.AllynCutts.com and you can call 610.437.4106 between 10 AM and 4 PM Eastern Time Tuesdays and Thursdays.