Starting a business with an “idea” but no “business plan” is like deciding to commercially manufacture ice cream with a home recipe rather than a proven formula — it may sound good in theory, but executing might prove to be more difficult than you thought.
A lot of folks typically plan out in their head the steps to take in starting their business and I’ve come to find the decisions in their plan to be emotional based. In order to build your vision and make it successful, it is important for you to understand each step of the process, to ensure your business model will work. I suggest the best tool to achieve success is a clearly written, well-thought-out business plan (BP). Clients tend to shy away from this approach as they sometimes consider a BP to be just a bunch of words and numbers with pie-in-the-sky ideas. In reality a BP can be very simple as well as very short. The point of the exercise is to eliminate potential emotionally based concepts by documenting a step-by-step approach of what your plan is, what you need to get there and when you want to finish.
Stay away from the Ready, Fire, Aim approach and write a business plan; your foot will be happy you did.
What is in a business plan?
Your business plan can show the adequate amount of funding required for building and sustaining through a period of time; identify a realistic time table; provide growth steps in the business and allow you to present a report to outside, interested parties to clearly present a current and future strategy.
How detailed is your business plan?
A useful business plan should be able to address most questions related to what you are planning to achieve in the business. The more detailed you are in each step and approach, the lengthier the plan will need to be. As an example; if you were to open a ice cream shop, you first need to know the primary customer you want to attract, this then allows you to look at demographics in a location. Doing this takes more steps but allows you to find an geographic area that targets your desired customer base and find a location within that boundary. Without this approach you may find you have built your business in a location with no interested customers. A few more steps written in your plan, explains and proves a concept.
Topics to consider in your plan and outline:
- Introduction of product and concept
- Why and how you believe the business endeavor can be successful
- Targeted area(s) and demographics of the business
- Identify if the business is unique or a variation of an existing theme
- Timetable to formulate, build and start to realize an ROI
- Vision of product and expansion for year 1-5
If outside investment is involved in the plan:
- The amount of revenue you will need to start Phase I and what how the revenue will be spent
- If revenue is required for Phase II, detail what will the revenue allow you to do
Other:
What’s in it for the investor and time frame for ROI?
- Will outside investors be offered shares in the company or is payback with interest?
- Will the outside investor be allowed voting rights or have the ability to voice an opinion?
- Will a third party accounting firm be involved in reporting?
- Will investors be invited to future growth phases of the business?
- Will investors be automatically bought out after a certain time in the business?
Contact Darryl. he can walk you through the steps to open a successful business.
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