You have decided that entrepreneurship is right for you and you have determined the specific business you want to start. Now you need to focus on creating your business plan. Your business plan is your success roadmap. Do you have an idea that will equate to a viable business? Your business plan will answer that question and many more!
A business plan includes your executive summary:
What type of entity have you created LLC, S-corp, C-corp, sole proprietorship?
What do you do?
Who do you serve?
Where do you operate?
How are you different than your competitors?
What are your mission and vision statements?
The purpose of the executive summary is to educate the reader as to the key aspects of your business.
In the document, especially if you are going to seek outside funding, you must include your resume. Your resume must convey to the reader WHY investing in your business is a sure thing. You must share your expertise in the industry your business fits within as well as your expertise as a business leader.
Your 3-year business projections are another key component to a successful business plan. List all projected expenses (startup costs and monthly expenses), projected monthly revenue, and then the resulting net profit.
When it comes to revenue projections, don’t be shy. Don’t hedge your bets and create a low financial projection. You need to show that you will actually turn a profit. In other words, be realistic but don’t be so timid that you don’t generate revenue. You will not get a loan if that’s your strategy.
Last but not least, do some market research with your ideal clients. Does anyone want your service? If yes, who? How many people? What are they willing to pay and when are they willing to start using you? If you can get a letter from these individuals stating that they do intend to use your services upon grand opening, get them. This will not only solidify your projections but will help with funding from a bank if you go this route.
Business plans are extremely valuable to the success of your business. Banks want to understand the risk of investing in your business, don’t you want to know that too?
Many times when a potential business owner does a business plan, they either realize they are all in and this is 100% the path, or they realize that the business venture is too risky or not profitable. Better to take a few weeks to develop a business plan and have this answer and a starting roadmap than to jump into a business and not have any guidance.
Today’s challenge, write your business plan.