A business plan is the road map for the direction you wish your business to travel. Before you can travel down that road you must figure out where you are going, why you want to go, how you are going to get there, how you will pay for your trip, who you are taking with you and what you will do when you reach your destination.
So when putting a business plan together it’s like planning a trip – doing the research, planning everything and then implementing those plans. The first thing that must be done is the background work before anything else can be started.
The 1st Step
Background work (research) ~ this is probably going to be the most detailed list of things that must be done in preparation for creating a plan.
SWOT ~ you probably already have a business idea and think it is great. However, just because you think your idea is wonderful doesn’t make it so. Your idea must be analyzed for its strengths, weaknesses, opportunities and threats. This is called a SWOT analysis and is probably the most important aspect of your background work and should never be neglected.
Are you an entrepreneur? What are your strengths and weaknesses? Be honest. Just because you have a couple of weaknesses do not mean you shouldn’t be in business – it just means you will need to acquire assistance in those areas. By doing a self assessment you know this fact in advance and can prepare for it.
Goals ~ what are your business goals? What are your personal goals? Be very clear as to what they are so you know what you want the end result to be both professionally and personally. Remember, the trip planning? You have to know where you want to travel to and why.
Financial elements ~ what financial resources are available to you? Do you need to obtain funds elsewhere? What are your financial needs both for your business and for personal expenses?
Risks ~ know what the financial risks are to start your business. If it is going to drain all of your personal funds be sure you are prepared to take the risk of losing it all. It could happen.
Costs ~ what is it actually going to cost you to start your business? Do you know precisely what you need in order to open your business and what everything costs?
Location ~ where will you open your business? Do you have a location picked out? Have you done your research as to availability, accessibility, and expense? What are the pros and cons of the place you intend to operate from?
Market research ~ what is happening in the market place? Look for everything related to your idea.
Customers ~ who will be your customers? What are their needs? Where will you find them? Can you reach them?
Competition ~ who is already doing the same type of business or offering the same product? What aspect are they not servicing and what do you think you can offer that is not already being supplied? What makes you unique?
Marketing Plan ~ you must also have a plan as to how you are going to market your business in order to reach your customers. By doing your previous research you will know what your business will be, who your customers are and what their needs are. By knowing these things you can think establish a plan as to how you will reach them – by marketing to them.
By doing the above step you should have a better understanding of whether your business idea is good, whether you have the ability, finances and skill to be successful. Knowing the market, who your customers are and the strengths and weaknesses of your competitor will give you a clear direction to follow. Remember your business plan is the road map for you and your business to follow. This is just the first step. More to come.