The Do’s and Don’ts of Establishing a Business Plan
That time has finally come—you’re ready to start a business of your own. You’ve got an idea to sell the world on, and perhaps you’ve even got some basic goals laid out. But getting started in the realm of business is often easier said than done, and investors are going to want to see more than just your dream if they’re laying down cold, hard cash. You’ll need to develop a business plan, something you can show investors to prove they won’t just be throwing their money away.
So, how does one go about developing a business plan? Let’s look at the basics of formulating a business plan, as well as some of the things to avoid, to better help realize your dream.
DO: Look at Different Types of Business Plans to Find What’s Best for You
Business plans don’t come one-size-fits-all these days. While what’s referred to as the “traditional” business plan is a good choice for most, traditional plans can take a very long time to create, and may require a fair amount of upfront investment in research and market analysis in order to prove there’s a demand for your product. If you were, for example, starting a restaurant and trying to get a business loan from a bank, they would likely want to see a more traditional business plan.
The alternative is the so-called “lean start-up” plan, which tend to be simplified and provide quick information through visuals such as charts, brief overviews of facts, and so on. These tend to be better for pitching to investors who don’t have the time to spend perusing a 50+ page traditional plan.
While you won’t be showing the extensive amounts of market research and demographic targeting in this style of plan, you should still be performing this research and have it available if requested. You can visit the Small Business Administration for a more in-depth analysis of business plans and to view some sample plans.
DON’T: Treat Your Business Plan as Gospel
Once you’ve gotten started at your business, you might find things aren’t going according to plan. The key thing to realize is: that’s okay.
No matter how well thought-out your plan is, it’s impossible to predict everything. Perhaps you’re attracting a different demographic than you’d originally envisioned, or your planned marketing vectors aren’t driving sales as expected.
A successful business is one that’s able to roll with the punches, and flexible enough to respond to opportunities as they happen. It’s important to have a plan to guide you, but occasional deviation from the plan is not only to be expected, it’s necessary.
DO: Educate Yourself On Business
Of course, making a business plan can be difficult, but it’s far more challenging for those without the knowledge to do it properly. The best way to get the education you need is to go to back to school and start taking business classes.
Entrepreneurs in start-ups often find themselves wearing a lot of hats in the early days, so having a solid understanding of a variety of topics like accounting, marketing, and supply chains will ensure that you can handle whatever problem stands before you. This doesn’t have to be a major undertaking; even an associate’s degree in business could provide you with a greater depth of knowledge and increase your odds of success.
Holding a higher degree, such as a Master’s of Business Administration (MBA), may even inspire greater confidence among investors. Check out some of the different business specialties available with this business degree resource.
DON’T: Focus Exclusively on a Business Plan When Starting Out
As noted above, having a plan is important, but it’s not as important as doing the things that actually help to get your business off the ground. Having prototype products to show investors, for instance, may make more of an impact than a description of that same product on a page.
Much of the business plan should be reflecting actions you’re already taking, or planning to take once you’ve secured sufficient funding. The fact that you’ve gotten started working and have something to show for it serves as proof that you’re serious about this idea to investors. Develop a plan, but let it reflect the work that’s underway, and don’t let the act of writing it turn into a form of procrastination.
By sticking to these suggestions, you can formulate a business plan that sets your ideas up for the greatest chance of success. Research and education are key to a good start, while remaining flexible and keeping the critical work going will ensure this business can shine in a way that attracts investors. It’s your dream, after all; why not do everything you can to see it flourish?