A business plan is what separates successful businesses from failed ones. It’s what entrepreneurs look at when they need guidance and what keeps them consistent in direction. But creating a comprehensive business plan is much easier said than done, so here are four tips to help:
Most businesses spend more time trying to craft the perfect business plan than they do gathering data and analyzing their situation. To be able to write a business plan that covers everything, you’ll need to have an intimate understanding of your company, products and services, and competition. Read every article and speak with every expert in the industry you can find.
Divide Into Key Categories
At the very least, your business plan should have a high-level company description, products and services, market analysis, and financial projections. Your company description should explain who you are and what you do. Products and services will cover customer profiles, inventory life cycles, and any relevant IP. Financial projections should include income statements, balance sheets, and cash flow statements.
Define Ways You Can Profit
It sounds easy to answer the question – how will I make a profit? – but most answers that people come up with are vague, such as “I’ll try to sell as much product as I can this month”. Be specific and realistic when figuring out ways to boost profit, such as reducing your product’s cost by a dollar and seeing how the market reacts or offering discount deals every month.
Prioritize Your Resources
Your business’ resources are limited, so you’ll want to make sure it’s allocated to operations that can result in the most profit and growth for your company. Using the market research you’ve accumulated, place exact number figures on each business category or department, such as sales and marketing, product R&D, branding, etcetera. You can put less money on departments that play less of a role in day-to-day operations, such as HR or secretarial services.
Before you get all excited about starting a business and making money, spend more time focusing on drafting your business plan. The more you spend thinking about your plan, the fewer unpleasant surprises you’ll find along the way and the faster you’ll be able to grow your business uninterrupted.