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Building Your Business Plan
Starting and managing a business takes motivation, research, preparation, talent, and foremost: a good business plan.
Before beginning, take the time to evaluate and explore your business and personal goals. Once you do that you can use the information to create a thorough and thoughtful business plan that will help you achieve these goals.
It's all in the Planning
Write a business plan - even a simple one to figure out who is your market, what your costs are, what you can sell monthly and annually, and what kind of money you can make. Do not start without understanding that you are priced, have the volume, and expenses realistic to make money. Answer the question first - before you commit everything you have to an idea. Not all ideas can make enough money to support you and the cost of running a business.
Developing a business plan is a great way to force you to think about things that you may not otherwise consider. The plan will become an important tool as you set out to raise capital, and it will provide a guide to gauge your success.
Think about the following before you write your plan:
Products and Services: You need to determine what type of business you're starting. What are you interested in doing? What service or product are you going to sell? Have a clear definition of your products and services. Understand the strengths and weaknesses. Who is the competition? Why is this product or service better? Know your costs for producing items or rendering a service.
Market: Who are your target customers? Think of niche markets and a specific target customer. How will you publicize and promote your business? This is one of the most underestimated aspects of a business. Advertising does not always bring clients. You must think of both traditional as well as non-traditional methods for attracting customers.
Business Plan Outline
There is no one formula for developing a business plan, but some elements are universal to most. Bplans.com offers a comprehensive list of business plans.
The body can be divided into four distinct sections:
1. Description of the business
1. Cover sheet
2. Statement of purpose
3. Table of contents
I. The Business
a. Description of business
d. Operating procedures
f. Business insurance
II. Financial Data
a. Loan applications
b. Capital equipment and supply list
c. Balance sheet
d. Breakeven analysis
e. Pro-forma income projections (profit & loss statements)>
f. Three-year summary
g. Detail by month, first year
h. Detail by quarters, second and third years
i. Assumptions upon which projections were based
j. Pro-forma cash flow
III. Supporting Documents
a. Tax returns of principals for last three years
b. Personal financial statement
c. For franchised businesses, a copy of franchise contract and all supporting documents provided by the franchisor
d. Copy of proposed lease or purchase agreement for building space
e. Copy of licenses and other legal documents
f. Copy of resumes of all principals
g. Copies of letters of intent from suppliers, etc.
You should also consider taking a class or classes so you can understand all the aspects of running a business. There are many free classes offered by a variety of institutions, nonprofit organizations and government programs such as www.sba.gov. Free information could save you time and hassles later.
Tory Johnson is the CEO of Women For Hire and the Workplace Contributor on ABC's Good Morning America. Connect with her at www.womenforhire.com.
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