It's that time. You've given this serious personal consideration and you feel that starting or buying a business is something that you want to do and that you feel you can do. Now you should sit down and commit your business idea or desire to buy a business, to paper.
Think of it like this; if you were driving to a place you had never been, you would probably use a map or at least have a good set of directions to get you to where you want to go. Wouldn't you?
In its simplest sense that is what a plan is, and what a plan does.
Every business needs a plan.
A business plan precisely defines your business, identifies your goals, and serves as your firm's résumé. It incorporates much of the financial and market information you've already gathered. Prospective lenders and investors will use your plan to decide whether your ideas are sound.
Preparing a business plan also allows you to anticipate and solve many problems before you open for business.
A business plan should clearly describe the business, the marketing plan, the financial management plan, and the management plan. It should address additional details about the organization and legal requirements of your business.
The business plan will reflect other business decisions as well. One of the more important will be your business' location. You must decide where you should rent a store or office or whether to operate your business from home. Your location will need to be accessible to customers and in compliance with zoning laws.
Remember: Each business plan is unique because there is no single route to follow in starting a business; each is based on individual goals and circumstances. But a well prepared business plan increases your chances for success. Take time to investigate, consult with experts, and prepare a plan that closely resembles what you expect of your business.
If your plan calls for financing the business, lending officers will be more likely to support your business proposal if you do your homework before requesting funds. Plan a sound, realistic budget. Your startup budget will usually include one-time-only costs such as major equipment, licenses and permits, utility deposits, beginning inventory, and down payments. An operating budget reflects the continuing expenses you will incur and how much money you need to make to meet those expenses. Because it often takes time to develop a customer base, you should allocate enough money to operate for several months without steady revenue. Finally, your budget should show how much income from the business is required just to break even.
Having access to capital helps you get your business started, but the degree of your project's success depends on how well you market it. Get to know your customers-their likes, dislikes, and expectations-to determine whether people will buy a product or service from you rather than from someone else.
These are all things you have to give consideration to in order to prepare a solid business plan.