You have all the ideas for your business in your head swirling around. Sometimes, it needs to go on paper. By putting it on paper, you can organize those thoughts more easily into actionable items and come up with a plan to either start or grow your business. There is nothing that can demoralize me more than working on a plan for days and then having it fail. However, I realize that having a plan, even if it fails, is extremely important. It’s important, because having a plan gives you a starting point and a map to get to the end. If it goes awry, at least you can more easily identify where it went wrong, and therefore, how to fix it to get back on track to getting to the end. Even if you never get back on track, at the very worst, you’ll be able to identify what went wrong, and therefore, never do it again. So, after you have come up with the product that you plan to sell or provide, I think the very next step is to draft a plan that gives you a roadmap on how you can make it a reality. You’ll typically need a business plan when you are trying to get funding, so it really doesn’t hurt to have one ready. Elements of the business plan should include:
- Executive Summary/ Business Overview – For this, I would strongly recommend being as clear as possible on what your business will do. It can always change in the future, but you need to start somewhere, and having a clear goal of what you are trying to achieve will help to make it happen.
- Company History – This is more applicable to existing businesses. Here you can document what the business has achieved since its inception.
- Industry Analysis – Technology has made so many industries and companies obsolete that it is extremely important to take a minute to determine where the future of the industry is heading. That way you can position yourself to be a leader in the field.
- Competitive Analysis – Always know who your main competitors are and document how your service or product will stand out or provide something that no one else has before.
- Services/Product –This section will allow you to finetune exactly what you will be selling and determine pricing.
- Marketing Plan – By examining each marketing option, you will be able to work out the optimal method or combinations of methods to use to get your product or service on the market. This will, therefore, allow you figure out how much it will cost.
- Management Team – If you are the only person who will make decisions in the company, then this will just be you. However, it might be a good idea to take this opportunity to see if it is worthwhile taking on a partner who can add value to the business and include them on the team. Use this section to document the experiences you (or the team) have, and therefore, how the company will be successful.
- Cash-Flow Projections – This is where all the numbers come together. If you are just starting the business, you will want to have startup costs separated from the monthly cash-flow projections. I would recommend projecting cash flows out for at least 2-3 years. Do projections using best case, worst case, and average expectations.
By the time you finish your business plan, you should have a solid map to follow. Even if you get derailed, you can revise and restart.