It seems that when an aspiring entrepreneur wants to start a business, the first thing they feel they need is a business plan. This is very true, however it’s important to understand why the business plan is so important. Do you tend to act on your ideas without having them written down? If so, do you find yourself redoing tasks that should have been done differently the first time? Your business plan helps you make better business decisions. This is important because bad decisions are costly and this is especially devastating to a small or start up business.
Here are some basic components:
- Marketing – You must do a thorough marking analysis which includes important indicators such as identifying your target market, an industry analysis, sales strategy, pricing strategy, and what the current market environment looks like.
- Competitive analysis – You must identify who your competition is. This will allow you to create your value proposition which identity’s why a potential client would chose your product of service over your competitions.
- SWOT Analysis – Which stands for Strengths, Weaknesses, Opportunities, and Threats. Try and list several bullet points for each of these as an honest assessment of your business and its chances for success.
- Personnel – This section should include both internal employees and contract labor needed. Create a list of all the job duties you need done to help you run your business and then match a job title to the different groupings.
- Financial projections – This section should be as accurate as possible. Make sure to note all potential expenses associated with the start up for the business as well as the monthly and yearly expenses.
Your business plan is your strategy. View each section as an exercise in being better prepared to launch or expand a successful business.