A good business plan accomplishes three key tasks. One, it focuses on the projected goals. Next, once the goals are down on paper, it compels the entrepreneur to come to some hard decisions about the feasibility of the venture. And finally, it can work like a sales document, aiming to draw the attention of potential investors by highlighting the features of the business.
Here are 7 things to include for your business plan to be effective:
- The Mission Statement Use this statement to spell out the reasons for getting into your chosen business. Perhaps you are starting a health and fitness center because you have the expertise and believe you have new ideas that you can put into practice. Although it doesn’t have to be lengthy, you do need to highlight your motives for choosing your venture.
- Describe the Business Provide detailed descriptions about every aspect of your business. Do you provide services, such as a consultancy firm or a beauty parlor? Or is it products you deal with? Describe your products. Do you source your products from a wholesaler? Or do you produce them yourself? What is it that makes your business different?
- Long-term and Short-term Goals Project your goals over a period of 3-5 years as your long-term objectives. These could include factors like marketing plans or new products for the future. Or perhaps opening new offices or stores, or setting up new online websites. Your short-term period could be from a few months up to a year. Goals could include getting a license for the business, thinking of a name for the business, finding space for setting up your office, or anything required to get your business going.
- Specify your Customers You need to specify who you envision as your customers. Who will need your products or services? Why would they require or want your products or services? This will also help you to concentrate on the kind of marketing you will need to do in order to attract your customers.
- Analysis of the Competition In order to determine what the odds are for your business to be successful, it is vital to learn about the competition. If you take the health and fitness center example, you will need to find out about all similar businesses in your locality and the kind of services they provide. If, for instance, most of them are machine-based centers, perhaps you could provide something different – additional services of yoga and meditation, for example. This will increase the chances of your business being a success, because you will be able to identify a niche that has less competition.
- Analyze Your Finances It is important to conduct a realistic financial analysis of your business. You need to spell out all your monthly expenses, both for the business and your own requirements, along with what you realistically think your monthly earnings will be. See that you put everything in the list such as upgrades of computers, the rent of the office, electricity charges, and so on. This will tell you whether you can afford your business while also maintaining your present lifestyle. You could discover that you will need to take out a small loan to manage your expenses until you start earning adequately from your business. Or, you could take a part-time job to cover for your current expense, until your business starts earning enough to become a full time enterprise for you.
- Marketing your Business Specify where and how you will market or advertise your business. You could do it through websites, write articles to be published in online article websites, via press releases, newspaper articles, or by offering presentations, free of cost, at local organization forums or groups. Try everything. You may be amazed at the amount of business that can be garnered just by making a free presentation at a meeting held by an association of homeowners in your locality.
In order to keep your business on track, keep referring to your business plan at periodic intervals. You can also change some of it down the road as you identify what is working for you and what is not.
If you have trouble formulating a business plan, or simply cannot find the time, consider hiring a professional to help. But whatever you do, just get started.