Effective Business Planning for Starting Your Business
There is no way to eliminate all the risks associated with starting a small business. However, you can improve your chances of success with good planning and preparation. A good starting place is to evaluate your strengths and weaknesses. The first thing you need to do is ask yourself is -- Is Entrepreneurship for You? It helps to carefully consider each of the following questions:
Are you a self-starter? It will be up to you – not someone else telling you – to develop projects, organize your team, and follow through on details.
How well do you get along with different personalities? Business owners need to develop working relationships with a variety of people including customers, vendors, staff, banks and professionals such as lawyers, accountants or consultants. Can you deal with a demanding client, an unreliable vendor, or cranky staff person in the best interest of your business?
How good are you at making decisions? Small business owners are required to make decisions constantly, often quickly under pressure and independently.
Do you have the physical and emotional stamina to run a business? Business ownership can be challenging, fun, and exciting. But it is also a lot of work. Can you face 12-hour workdays, six or seven days a week?
How well do you plan and organize? Research indicates that many business failures could have been avoided through BETTER PLANNING. Good organization of financials, inventory, schedules, and production can help avoid many pitfalls.
There are three types of people who want to start their own business:
(1) Those who have an idea and never put their ideas into action;
(2) Those who have ideas and say “Let me do this and see what happens;”
(3) Those who have ideas, plan how they are going to transform their ideas into a vision, and implement their vision.
Of the three kinds of people mentioned above, more than likely, the only type of person who will be successful is number three (3) because he/she has engaged in PLANNING – the key ingredient of success. As a matter of fact, the Small Business Association (SBA) estimates that 80% of start-up businesses fail in the first three (3) years of operation due to the lack of planning. Therefore, it is crucial to convert your ideas into a Business Plan (action plan) in order for them to produce fruit.
The Business Plan is the foundation of the long-term success of any business venture. It must be * Realistic * Well-Conceived and Researched *Communicated to All Levels of the Organization
* Followed * Measured * Reviewed *
Refined Benefits of an Effective Business Plan are:
• Clear direction for the organization
• A focused organization working together
• Prioritization of needs
• Participation of all levels in developing the plan
• Improved communication
• Ongoing analysis and improvement
• A benchmark for evaluation
• Forum for idea generation and sharing
• Higher expectations
• Higher performance
Five Basic Components Discussed in the Business Plan are:
THE COMPANY
A. Business Description
B. Short Term and Long Term Objectives
C. Management and Ownership
MARKET ENVIRONMENT
A. Industry Analysis
B. Market Overview Analysis
MARKETING STRATEGY
A. Discuss the products/services offered.
B. Identify the customer demand for your product/service.
C. Identify your market, its size, and locations.
D. Explain how your product/service will be advertised and marketed.
E. Explain the pricing strategy.
MANAGEMENT/OPERATIONS
A. Explain how the business will be managed on a day-to-day basis.
B. Discuss hiring and personnel procedures.
C. Discuss insurance, lease or rental agreements, and issues pertinent to your business.
D. Account for the equipment necessary to produce your products or services.
E. Account for production and delivery of products and services.
FINANCIAL ANALYSIS
A. Explain your source and the amount of initial equity capital.
B. Develop a monthly operating budget for the first year.
C. Develop an expected return on investment and monthly cash flow for the first year.
D. Provide projected income statements and balance sheets for a two-year period.
E. Explain your personal balance sheet and method of compensation.
F. Discuss who will maintain your accounting records and how they will be kept.
START PLANNING TODAY, DON’T DELAY – You will be on your way to operating a efficient business that’s well planned, and destined for success.
Karmen A. Booker is an Attorney, Business Consultant and owner of Compu-Perfect Professional Services, a business consulting firm specializing in business incorporation, establishing limited liability companies and contract drafting & reviews. www.compuperfect.net, or kbooker@victorypress.net She’s also the author of Biblical Entrepreneurship; Operate Your Business God’s Way. This book includes seven vital steps to starting your business and detailed information on the legal requirements involved based on her experience as an attorney. This book is available at Virtual Word Publishing, Inc. -- www.virtualwordpublishing.com
Are you a self-starter? It will be up to you – not someone else telling you – to develop projects, organize your team, and follow through on details.
How well do you get along with different personalities? Business owners need to develop working relationships with a variety of people including customers, vendors, staff, banks and professionals such as lawyers, accountants or consultants. Can you deal with a demanding client, an unreliable vendor, or cranky staff person in the best interest of your business?
How good are you at making decisions? Small business owners are required to make decisions constantly, often quickly under pressure and independently.
Do you have the physical and emotional stamina to run a business? Business ownership can be challenging, fun, and exciting. But it is also a lot of work. Can you face 12-hour workdays, six or seven days a week?
How well do you plan and organize? Research indicates that many business failures could have been avoided through BETTER PLANNING. Good organization of financials, inventory, schedules, and production can help avoid many pitfalls.
There are three types of people who want to start their own business:
(1) Those who have an idea and never put their ideas into action;
(2) Those who have ideas and say “Let me do this and see what happens;”
(3) Those who have ideas, plan how they are going to transform their ideas into a vision, and implement their vision.
Of the three kinds of people mentioned above, more than likely, the only type of person who will be successful is number three (3) because he/she has engaged in PLANNING – the key ingredient of success. As a matter of fact, the Small Business Association (SBA) estimates that 80% of start-up businesses fail in the first three (3) years of operation due to the lack of planning. Therefore, it is crucial to convert your ideas into a Business Plan (action plan) in order for them to produce fruit.
The Business Plan is the foundation of the long-term success of any business venture. It must be * Realistic * Well-Conceived and Researched *Communicated to All Levels of the Organization
* Followed * Measured * Reviewed *
Refined Benefits of an Effective Business Plan are:
• Clear direction for the organization
• A focused organization working together
• Prioritization of needs
• Participation of all levels in developing the plan
• Improved communication
• Ongoing analysis and improvement
• A benchmark for evaluation
• Forum for idea generation and sharing
• Higher expectations
• Higher performance
Five Basic Components Discussed in the Business Plan are:
THE COMPANY
A. Business Description
B. Short Term and Long Term Objectives
C. Management and Ownership
MARKET ENVIRONMENT
A. Industry Analysis
B. Market Overview Analysis
MARKETING STRATEGY
A. Discuss the products/services offered.
B. Identify the customer demand for your product/service.
C. Identify your market, its size, and locations.
D. Explain how your product/service will be advertised and marketed.
E. Explain the pricing strategy.
MANAGEMENT/OPERATIONS
A. Explain how the business will be managed on a day-to-day basis.
B. Discuss hiring and personnel procedures.
C. Discuss insurance, lease or rental agreements, and issues pertinent to your business.
D. Account for the equipment necessary to produce your products or services.
E. Account for production and delivery of products and services.
FINANCIAL ANALYSIS
A. Explain your source and the amount of initial equity capital.
B. Develop a monthly operating budget for the first year.
C. Develop an expected return on investment and monthly cash flow for the first year.
D. Provide projected income statements and balance sheets for a two-year period.
E. Explain your personal balance sheet and method of compensation.
F. Discuss who will maintain your accounting records and how they will be kept.
START PLANNING TODAY, DON’T DELAY – You will be on your way to operating a efficient business that’s well planned, and destined for success.
Karmen A. Booker is an Attorney, Business Consultant and owner of Compu-Perfect Professional Services, a business consulting firm specializing in business incorporation, establishing limited liability companies and contract drafting & reviews. www.compuperfect.net, or kbooker@victorypress.net She’s also the author of Biblical Entrepreneurship; Operate Your Business God’s Way. This book includes seven vital steps to starting your business and detailed information on the legal requirements involved based on her experience as an attorney. This book is available at Virtual Word Publishing, Inc. -- www.virtualwordpublishing.com
posted by Mama Arika at 8:18 AM
0 Comments:
Post a Comment
<< Home