Starting a business is exciting. But it is also very challenging! What does it take to start a new business? There are several factors and business considerations which you have to learn in order to get ahead.
First is your business plan. You have to create one which would outline your company mission, your market, your service or product line, your organization and most importantly, your financial projections. Next, you should choose your business structure. Would you like to be a single proprietor or would you set-up a partnership or a corporation? The business structure you choose will have its legal and tax implications.
The next steps will involve registering your business, building your capital investments, financing your business, banking, organizing, managing and other set-up procedures. Accounting set-up should form part of your business concern. You may hire an accountant for this purpose; but the bottom line is, you still call the shots and make the decisions. Therefore, you need at least to understand the numbers even if you have an accountant to keep your books.
AND WHAT’S A BUSINESS PLAN …
A business plan is just as important for an established business, irrespective of its size, as it is for a starting business. For an established business, a business plan demonstrates that careful consideration has been given to the development of the business. For a starting business, it shows that the business owner has done his or her homework. Here are the critical objectives of a business plan :
- Serves as guide or blueprint of the business during the lifetime of business operation.
- Helps the business owner or management in business development
- Provides framework for business strategies over the next target period of time
- Serves the requirement of third parties evaluating the business (shareholders, agencies, banks, investors, partners, clients, etc.)
- Offers benchmark for measuring and reviewing the actual performance of the business
Preparing a written business plan is not your end-result ; the realization of the plan is your ultimate goal. Writing a plan is essential – “failing to plan can mean planning to fail”. During the planning process, business owners and managers should clearly understand what they want to achieve, and how and when they can do it. Business planning plays a vital role in helping to recognize hidden opportunities and/or to avoid mistakes.
LEARN THE PLANNING PROCESS …
The planning process starts with your business strategy. There should be a critical examination to probe the existing or perceived strengths, weaknesses, opportunities and threats (S-W-O-T Analysis) of your business. SWOT Analysis leads to strategy development identifying your company’s VISION, MISSION, OBJECTIVES, VALUES, STRATEGIES, GOALS and PROGRAMS.
In writing your business plan, it is important to size it to fit your business. Your business plan should be only as big as what you need to run your business. A standard business plan outline should contain the following :
- Executive Summary (Your Vision, Mission, Objectives & Values)
- Company Description (Company Ownership, History or Start-Up Plan, Location and Facilities)
- Products or Services (Describe what you are selling – Focus on customer benefits)
- Market Analysis (Your target market, market needs, market trends, industry analysis and competition)
- Strategy and Implementation (Your Value Proposition, competitive edge, marketing strategy, pricing strategy, sales strategy and milestones which include management responsibilities with dates and budgets)
- Web Plan Summary (For e-commerce, include discussion of website marketing strategy and development costs)
- Management Team (Describe your organization and your key management team members)
- Financial Analysis (Make sure to include at the very least your projected financial statements : Profit and Loss, Balance Sheet and Cash Flow along with the key financial indicators and business ratios)
On last note, keep your business plan up-to-date! Your business plan will be beneficial only if you update it frequently to reflect what is happening within your business. Measure your projections against what actually happens in your company. Use the results to analyze the effectiveness of your operation. You can then implement changes that will give you a competitive edge and make your business more profitable.