Business Plan...

[DecoArtImports]

Hello everyone,

Just wondering if anyone actually create a business plan before starting the business? I have been asked by my adviser to create one many time but I have been postponing it . Just wondering how important it is. Thank you all!

[KevinW]

Very. Especially if you will be looking for outside investment...

[Karri]

A business plan is so important, even if you are not seeking outside investment. Without clearly defined goals and a roadmap outlining how you will meet those goals, you ultimately jeopardize your chances to succeed over the long run. You can "wing it" for a while, maybe even a few years, but even a brief document that you update now and then will force you to flesh out the hows and whys of making a profit and thus sustaining yourself.

Cheers,
Karri

[iconcameras]

A business plan is definitely important. As Kevin mentioned, it's especially important if you're looking for outside investment; but even if you're not, there are are several good reasons to make one. It helps to keep goals in focus, and helps to guard against "rabbit-trails"...pursuing things that aren't in line with your ultimate plan.

If your options are "short/sweet" or "nothing at all," definitely go with the short version. It's possible to be overly fastidious, and get too caught up in the planning to actually execute on anything.

-Matthew

[DecoArtImports]

Thank you so much for confirming the need of a business plan! Now I just have to commit myself to create one

[Gav]

There is an old but exceptionally true saying ... "Fail to Plan and you Plan to Fail" ... A Business Plan is your "roadmap" to your business direction and often the difference between a business succeeding as opposed to a business collapsing and become a statistic. You need to understand your own business inside out before trying to sell your product or service to your client. If you don't understand it yourself then you cannot expect your clients to understand your product or service or the direction your business is heading.

Eg. Working out fixed costs per product. You need to know your wholesale costs, shipping costs, tax/import duties, storage costs, etc to be able to work out how much mark up you place on each product to determine a reasonable profit margin to ensure firstly profits and secondly capital growth to allow your business to expand. This and many other factors are accomplished when you formulate your business plan.

One of the most important factors of any business plan is a SWOT (personally and also on your business and your competition as entities). A SWOT stands for Strengths, Weaknesses, Opportunities and Threats. It may sound a little strange if you have never done a SWOT analysis before, but it is a crucial factor. You need to know what your own personal strengths are that you can apply to your business (eg. Experience, ability), your weaknesses (perhaps you don't like confrontation with customers when negatives are given to you, or perhaps you dont like talking on the phone, etc), your opportunities (example of new business owners is they can operate from home based offices, keeping overheads down therefore offering lower prices than their competition) and threats (if you are a sole trader a threat could be getting sick and being unable to function in your business and service your customers, or perhaps restricted cashflow could be a threat). Every person has a different SWOT, but it is an important thing to know. And even more important to know your main competitor(s) SWOT scenario. Eg - Strengths of a competitor could be good cashflow and capital to allow mass advertising, or well branded business that is recognised by people, and their weakness could be your new business offering the same products at greatly reduced prices as your overheads do not compare with theirs therefore they cannot drop to compete with your price cuts. Etcetera, etcetera.

We have a free business plan template online that you are welcome to download (in word format) that allows you to fill in the blanks to get a basic business plan accomplished. This will at least get you started if you are a little confused on how to write or formulate one. Download it by clicking the link here - Free Business Plan

Hope this helps

Regards

Gav

[Ralph]

Its been said, you need a PLAN. Do it.

Gav
I have never heard of SWOT before. We do the same thing, but never had a name to for it. That makes it easy for everyone to remember. Thanks

[baskethill1]

Yes you need a business plan, especially if your trying to get financing. But expect it to be not that relevant after about 6months. Whats the old saying "man plans, g-d laughs" You have to be able to go with the flow. OH, by the way, however much money you think you will need....double it.

Most folks also recommend a marketing business plan.

Basket Hill