To write or not to write business plans
|Any offline or online bookstore will offer thousands of guides on how to write business plans. Is it a required thing to do? No, it isn’t.
The only reason for this hype is that you would need it when asking for funding - be it with the banks or angel investors. That’s it. You don’t need to have one for any other reasons.
Yet there are definite benefits for you to actually work on one.
|Have you ever had that slightly annoying inner feeling of a doubt that your idea is not ready yet? Is it ready for that final ‘just do it’ phase?
The tool how to get that confidence and check whether you thought things through is actually to get an outline of a business plan developed.
Some bits are more exciting and easy to write as you clearly know stuff. Some parts would be a bit of a nightmare and you would need to think whom to delegate this in future. Yet treat it as a checklist:
|1. Can you formulate your company's mission, goals and outline your product or service concept? You should summarise why you should be in business in just a few sentences.|
|2. Can you briefly describe how the company should be formed, who would be the share owners and outline the startup costs and initial sources of funding?|
|3. Can you say that you know the market well and it enables you to say that your idea is viable?
For that you would probably need to do market segmentation, analyse your industry and the market, assessing which segment of the market you are going to target.
If you can say what is your Unique Selling Proposition on that chosen target segment and you can back it by some research done - that is brilliant! (we will cover analysis part a bit more later on yet just get your current knowledge together)
|4. Marketing and sales strategies are not just big words and titles. They are visionary directions describing how to get to your goals described above from the starting point where you are (also described in the market knowledge). It is up to you to get to a success point as there is no one right way to it.
At this stage you need consider specific details about your products, how would you promote them, at which price you will sell them and finally how would you get to market. We urge you to get those ideas first even though you will want to get some professional help involved at the later stage.
|5. Team is another aspect you need to carefully consider.
You have already outlined your main partner(s), but do you plan to employ anyone else - full-time, part-time and how much it would cost you? You may need to go back to your plans, numbers and strategies that you outlined above and check whether there are aspects you are not feeling very confident to cover and whether you need i.e. to hire an experienced sales professional who would contribute to your ambitious sales plans?
|6. Money is a reward for your efforts but in this checklist it will be a reality check. Most of investors would need to see: balance sheet (for a few years), profit and loss (P&L) statement, projected cash flow (are you actually able to run a business in any given month without being stuck without a penny available).
If you are attracting investors they would need to know that they money would be much better off with you rather than just depositing it in the bank for a small but secure interest rate. You would do the same.
Remember that if you do not plan to borrow money this Financial part is solely for your understanding what do you need and when.
|One would say it is a lot, but it is only up to you to decide how detailed you want to develop your business plan.
The benefit of continuously improving your business by working on the business plan is evident, yet it should not confuse you - you have a lot of resources that can help you to build this all from your initial idea to a fully running business. We would also produce a guide on startup resources you can use - be it accounting help or marketing.
Have fun, inspiration will find you working!
27 Nov 2013
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