Disclaimer: Please note that I am not an expert in owning a Business. This series is meant to solely provide information to the reader.Statistically between 55 to 60 percent of all new businesses fail within the first five years and about 95 percent of these failures are due to poor management of the business. If you think about it, you wouldn’t want to purchase a home from a contractor who didn’t have a blueprint and skill as a builder. And yet thousands of people with little or no business sense try to build a business without any kind of plan. Typically, home-based businesses will start out as a dream, a way to make quick extra cash, believing that the home-based business is a good idea and with hard work it will become a big profiting business. Don’t let the statistics scare you, but the statistics stand as a reminder that there is a certain amount of business and management skill, knowledge and experience and hard work needed to be successful enough to profit and grow into a business.
That is where a business plan comes in for the new business owner. This is like a road map of knowing what you need to do, how much it’s all going to cost, and where you can go wrong. It forces the business owner to think specifically about their goals and the path they would like to take to reach those goals. But don’t just write your business plan and walk away from it; review it regularly to make sure you are on the right track, answer questions you may have, and to spark new ideas that you never thought of or forgot about. And by no means does your business plan have to be written in stone, it is recommend that you change it as your business grows and develops. This helps planning for the future of your business a little easier as you can see how past experiences have affected your business.
There is no set type of business plan; it can be as short as one page or as long as several hundred pages. Ultimately, it is up to you to determine how long your road map needs to be to grow your business.
Here are a few elements of a typical business plan to get you started……
1)Business History: How, why, and when the business was started.
2)Business Summary/Mission Statement: A definition of your business. Include a description of your business goals, products, and services and include unique features or customer benefits.
3)Management Information: List who is behind the business; their experience, education, background, qualifications and discuss the legal form of the business.
4)Manufacturing Plan: Here you will describe the required equipment and facilities needed for your business. Make a list of raw materials needed to start the business; how and where to obtain them, their estimated costs, how/where to store/inventory the materials, and include labor and overhead costs involved in the manufacturing process.
5)Production Plan: Define and list how the work will get done; by whom and at what labor cost, if you are using labor other than your own.
6)Financial Plan: List your expected sales projections and expense figures, cash flow figures, and a balance sheet showing the business assets and any owner investments all for one year; with projections for the next two to five years. This section of your business plan should be visited on a regular basis, as it will change quickly and is often dependant upon all these figures within the balance sheet to begin showing your road map of successful or failure within your business.
7)Market Research: Make a list of your target market, your customers, and your competition. When listing your competition, include their pricing structure (if known) and method of distribution as these will also affect how you market to your customers.
8)Marketing Plan: List how you are going to reach your customers, the distribution method, and the anticipated costs of your marketing efforts. You will also include any advertising campaigns, such as web sites, online selling venues, business cards, brochures, and any craft shows or festivals you will participate in.
It is not hard to get started with a business plan, just remember to visit it often to see your business evolve and grown into something big. Use your business plan to mark your successes and learn from your failures. Start with a small business plan and let it grow with your business; this is one way to watch and see how your business and goals are achieved.
That is where a business plan comes in for the new business owner. This is like a road map of knowing what you need to do, how much it’s all going to cost, and where you can go wrong. It forces the business owner to think specifically about their goals and the path they would like to take to reach those goals. But don’t just write your business plan and walk away from it; review it regularly to make sure you are on the right track, answer questions you may have, and to spark new ideas that you never thought of or forgot about. And by no means does your business plan have to be written in stone, it is recommend that you change it as your business grows and develops. This helps planning for the future of your business a little easier as you can see how past experiences have affected your business.
There is no set type of business plan; it can be as short as one page or as long as several hundred pages. Ultimately, it is up to you to determine how long your road map needs to be to grow your business.
Here are a few elements of a typical business plan to get you started……
1)Business History: How, why, and when the business was started.
2)Business Summary/Mission Statement: A definition of your business. Include a description of your business goals, products, and services and include unique features or customer benefits.
3)Management Information: List who is behind the business; their experience, education, background, qualifications and discuss the legal form of the business.
4)Manufacturing Plan: Here you will describe the required equipment and facilities needed for your business. Make a list of raw materials needed to start the business; how and where to obtain them, their estimated costs, how/where to store/inventory the materials, and include labor and overhead costs involved in the manufacturing process.
5)Production Plan: Define and list how the work will get done; by whom and at what labor cost, if you are using labor other than your own.
6)Financial Plan: List your expected sales projections and expense figures, cash flow figures, and a balance sheet showing the business assets and any owner investments all for one year; with projections for the next two to five years. This section of your business plan should be visited on a regular basis, as it will change quickly and is often dependant upon all these figures within the balance sheet to begin showing your road map of successful or failure within your business.
7)Market Research: Make a list of your target market, your customers, and your competition. When listing your competition, include their pricing structure (if known) and method of distribution as these will also affect how you market to your customers.
8)Marketing Plan: List how you are going to reach your customers, the distribution method, and the anticipated costs of your marketing efforts. You will also include any advertising campaigns, such as web sites, online selling venues, business cards, brochures, and any craft shows or festivals you will participate in.
It is not hard to get started with a business plan, just remember to visit it often to see your business evolve and grown into something big. Use your business plan to mark your successes and learn from your failures. Start with a small business plan and let it grow with your business; this is one way to watch and see how your business and goals are achieved.
