The Beginning Is...The Business Plan
35% of startups fail within the first year. And over 90% of startups will fail within the first 3 years.
Yet few entrepreneurs seem to realize that the beginning of their business is one of the most critical yet overlooked operations in building a successful venture. The business plan has been a cornerstone in our nation's history, and it can play an integral role in making sure your startup is no exception.
What is a Business Plan?
A business plan, or also known as a startup plan, is a formal proposal detailing the mission and goals of your venture. It should consist of the following information:
• Product Features • Value Proposition • Competitive Advantage • Financials (Funding) • Prospectus (Commercialization)
The document is usually written by one person but it can also be written by an executive committee consisting of business managers or C-suites. A member of the board should always be included as well to ensure that all involved parties are in agreement about the direction that the company is heading. The document should be carefully reviewed with each member before being presented to investors and/or customers for critique and comment.
When preparing a business plan, you should aim to get as much feedback as you can. This will help you identify the strengths and weaknesses of the venture, which may help to improve your plan and better prepare it for investors. When preparing a business plan, keep these points in mind:
• A good business plan should not be more than 50 pages long. • Include good graphics to make the document visually appealing. • Investors want to see numbers that add up. Be sure your financials are clear and concise. • Include information about yourself in the "owner's qualifications" section under "mission statement." Don't ever lie about yourself or stretch the truth in this section. This will come back to hurt you and your business. • Try to speak as directly to your target market as possible. If you are presenting a sales plan, do your research and be sure that you are speaking directly to the people who will buy from you. • Know your numbers, both in terms of financials and time line for the venture. Don't overly exaggerate or understate the status of these aspects. • Know your market. Be sure to research the market and customer you will be targeting in your venture. • Be sure to include the next steps you plan to take both personally and professionally. Set a time table for when you would like to accomplish milestones in the business plan.
After presenting your plan, be prepared for any questions investors may have and ask them which areas they think should be improved upon or added. In addition, there are numerous resources that can help with creating an effective business plan and preparing it for potential investors or customers; they are listed below:
"How To Write A Business Plan" from Bplans (http://www.bplans.com/business_planning/how_to_write_a_business_plan.htm).
"Writing A Business Plan: What You Need To Know" from Small Business Information (http://www.sba.gov/content/writing-business-plan-what-you-need-know).
If your business plan is prepared ahead of time, you will be able to use it as a tool for starting your business as well as a way to prove the long term viability of your idea to potential investors and customers. Before you get started, though, it is recommended that you consult with experienced professionals in the field who can offer their insight and advice on how to improve your plan. Once you have your plan in hand, then it is time to create the actual business plan. You will need to consider the following:
The main reason for having a business plan is to perceive a business idea before moving forward with it. Such application will depend on how many heads are involved in developing the plan and decide what direction or strategy to follow. Many entrepreneurs wish to be in possession of a clear and detailed strategy so they can be flexible in their plans and possibilities. Some tend to forget that there are other aspects that need consideration such as the resources which should be used for development, proof of concept or MVP (minimal viable product) but most often it is necessary to start from scratch.
The next step is to secure an attractive business plan template that reflects the most relevant features concerning the product or service. The process of determining a template should be made prior to writing a business plan and this should determine how you approach the writing process. There are many excellent templates which can be found on the internet along with a variety of samples that cover any type of business such as data mining, small businesses, food and hospitality etc. Your unique plan may also include an executive summary, financial forecast and various other sections depending on your specific industry.
Once you have a template, it is possible to begin developing the plan by first identifying the main objective of your company. You will want to ask yourself as well as other experts whether or not your idea would be profitable in the future. Sometimes, many startups are started simply because an individual or a group thought that their idea was worth pursuing and often they will find out later that they were wrong. Therefore, if you wish to create a successful business plan template this should be considered one of the most important steps in the process.
In addition, it is important to take into consideration marketing and sales strategies as this impacts further development of your company. You may also want to consider your employees along with legal and financial aspects. To conclude, you may want to ask potential investors or customers whether or not they would be interested in joining together with you on the venture. Most individuals will not even consider a business until they have had the opportunity to read a comprehensive business plan so that they can tell if it is something worth doing in the first place or not.
When presenting your business plan to a potential customer or investor, you should always make sure that it is well presented and has a professional appearance. This will help to ensure that you get the results you want. You should then make sure to clearly explain the purpose of your document and how it will benefit them. You should also make sure that the business plan is easy to read and understand so anyone who reads it will be able to follow along with what you have included. If they are not interested, they may give you some feedback on how they believe it could be improved upon so this information could actually be helpful in improving your plan.
Conclusion
The truth is that there are a great deal of things that can go wrong during the process of setting up a business. Certainly, if you are starting out without any system or plan in place, you are likely to experience some problems. Quite often, failures can be avoided by taking the time to do some research, carefully preparing and planning ahead. As long as you get a business set up and moving in the right direction as quickly as possible, it’s all good. Businesses should be managed well but ultimately they should be run for profit in order for them to succeed in the long term.