Part of my day to day job is helping advise start-ups or potential entrepreneurs on the metrics of their business plan, and model. It’s amazing how many people jump into something head first without planning things out. Whether you already own a successful business and are looking to expand, or if you’re an entrepreneur looking to start up your own business, a lack of planning could derail the entire process.
If you’ve tried to make a business work before without a business plan, it could be the reason why it never really got off of the ground. The business plan is much more than a formal document; it’s the start of really getting a handle on what your business is going to be. Crafting a solid proposal, though, isn’t something that should be rushed, especially since it’s going to be used as a blueprint to build and grow your business. The key is to be proactive. If you want your idea to work the first time around, follow these simple steps:
Develop Solid Goals and Objectives
Before you start working on your business plan, take the time to focus on developing solid goals and objectives. These can be subject to change throughout the creation process, but it’s important to have a place to start. These ground objectives typically don’t change and are going to set the scene for what your business culture is going to be like.
A clear and concise vision of where your business is heading, as well as a time line of when you want it to reach its destination, should be viewed as a required part of the process. They’re the skeleton of your new creation, more importantly, they are promises to yourself and honest actualization of what you intend to accomplish. These goals and objectives will form the cornerstone of your business – which is why this step needs to be complete before you proceed any further.
Dig Deeper and Add More Details
Don’t settle for scratching the surface when it comes to setting goals and determining your objectives. Dig even deeper by creating a detailed outlook and vision for your company. Focus on things such as where you see your business in one, five and even 10 years from now. Do you want to expand internationally, or keep it local? How do you plan on growing from within (e.g. salaried employees, contractors, etc.). These types of questions are an essential part of this process.
It may seem like you’re putting the cart before the horse, but this type of detailed planning will make it easier for you to build your plan around your vision. Remember that you want to dress for the job that you want, not the job that you have. In the same way you should write your business plan for the company you want to become, not just the start-up that you have right now.
Anticipate Challenges – And Solutions
The vendor you wanted has increased his prices. Shipping is a bigger challenge than anticipated. Zoning regulations have changed. The bottom line? Things rarely work out exactly the way they should, especially when you’re working on a large project. Therefore, you have to stay two steps ahead. Set specific goals that are based on realistic expectations. Anticipate what will happen if you have a good, great and even a bad year as well. Completing this basic exercise will allow you to establish versatility when it comes to your strategic planning skills.
While it’s impossible to predict the future, you can get a good idea of where your local market is heading if you do in-depth market review and research. Find out what sort of market is available for the product you wish to sell, check on what your competition is doing, and find out how it is doing. Look into what businesses like yours failed and if possible talk to someone and find out why they failed. That way you are less likely to repeat those mistakes.
Research Everything Related to Your Business
You have to do your homework before putting together your plan, and that means researching everything related to your niche, market or industry. Study past reports, financial statements and statistical studies as well as rules and regulations that may apply within your local city or state.
Carefully examine the different types of business structures you can choose to determine which one is the most suitable fit for your specific needs and future projections. Even if you establish your business now as a sole proprietorship, your state may require you to upgrade to an LLC or corporation depending on the amount of revenue and gross receipts your company is able to generate each year.
The Bottom Line
Just as the average building needs a blueprint before the construction process can officially begin, your company will need to have a well-developed business plan in place before you can start any building of your own.
Take the time to carefully research your chosen market and overall industry carefully so that you can identify potential areas of growth of which your company can take full advantage. Review and revise your plan accordingly even years after your business has been established, because it will always be able to help you strategize the next big move for your company as a whole.