Create a business plan
A business plan helps to define what you think you need to launch your business, large or small. It summarizes the sense of your business in a single document. It also creates a map for investors, bankers, and other interested parties to use when determining how they can best help you and to help them decide whether or not your business is viable. There are seriously good books available on writing business plans that cover many chapters, and you should avail yourself of at least one of these as a guide (bookshops, libraries and online are good places to find these). In a nutshell, your business plan should consist of the following elements:
Come up with an executive summary – There will need to be several basic parts in your business plan. The first is the executive summary. Describe the overall business concept, how it will be monetized, how much funding you will need, where it stands currently, including its legal standing, people involved and a brief history, and anything else that makes your business look like a winning proposition.
Write your business description – Describe your business more specifically, and how it fits into the market in general. Who will you be selling to, and how will you deliver your product? If you are a corporation, PLC, partnership or sole proprietorship, state that, and why you chose to go that route. Describe your product, its big features, and why people will want it.
Come up with some marketing strategies – You must know your market if you are to be successful, so spend a great deal of time analyzing just who it is that will want your product, and how you plan on appealing to them to take cash out of their bank account and give it to you. What is the size of your market, will there be opportunities to expand the initial market, and what are your sales potentials? When you understand these variables, you want to sell them to the person reading your business plan.
Do a competitive analysis – As you develop the above sections, you will learn who your key competitors are. Find out who is doing something similar to what you are planning, and how have they been successful. Just as important is to find the failures, and what made their venture fall apart.
Write your development plan – How will you create your product? Is it a service that you are offering, or if it’s more complex—software, a physical product like a toy or a toaster—whatever it is, how will it get built? Define the process, from sourcing raw materials to assembly to completion, packaging, warehousing, and shipping. Will you need additional people? Will there be unions involved? All of these things must be taken into account.
Plan your operations – Who will lead, and who will follow? Define your organization, from the receptionist up to the CEO, and what part each plays in both function and financials. Knowing your organizational structure will better help you plan your operating costs, and fine-tune how much capital you will need to function effectively. Keep in mind that your business will continue to evolve and that this will be a rough idea of who is needed to keep things functioning; as the business grows, you’ll likely make changes to the hiring plans to fit what is happening at the time. Also, in a number of cases, the “staff” is you and whomever you can consult, such as your lawyer and accountant. This is fine, as long as you show that you’re prepared to pay for external advice and help until your business is ready to take on staff.
Cover the financials – Succinctly, this describes how much you plan on spending, and how much you’re making. Since this is the most dynamic part of your plan, and perhaps the most important for long-term stability, you should update this monthly for the first year, quarterly for the second year, and then annually after that.