Starting A Business - What is a business Plan?
So,
you've decided to start your own business - congratulations! It's a huge leap from letting someone else
take care of taxes, accounting, payroll, inventory, and/or a myriad of other
activities necessary to run a business.
However, running your own business has its advantages, too. You get to be your own boss, set your own
hours and days to work, and are responsible for your own success. It can be a wonderful way to free yourself from
the monotony of 9-5 and work at doing what you love, but you have to begin by
asking a few questions:
1.
Are you doing what you love, or just doing something you’re good at? A desire to get away from the regular working
world can be a good motivation to work for yourself, but you should be excited
to get up in the morning to do what it is you have chosen to do for a living.
2. What is it you are planning to do? What niche is it going to fill? Is there a need for what you can
provide? Will the market bear another in
your industry?
3. What technical skills or talents do you
have? Just being able to do something
may not be marketable enough to convince customers, lenders, or investors that
you are a good financial investment.
4. Who are your competitors in your chosen
market and how are you going to do it better?
Why should customers come to you?
What do you have to offer that no one else does?
Once
you are satisfied with the answers to these questions, it is time for the
decision of what kind of business structure you will use. Will you be a sole
proprietor, responsible for every facet of how to run the business? Will you get a partner to share the cost and
workload, but also the profits and the business decisions? Perhaps the decision will be made to
incorporate - with its financial safeguards but more complex and costly
structure? At this stage, legal advice
is recommended, if only so that you fully understand the advantages and
disadvantages of your chosen structuring plan.
Many lawyers will provide a free or reduced-rate primary consultation,
though often not more than an hour. When
the structure is finalized, a name for the business should be decided upon, if
not already having been done so in advance.
It should be easy to remember, avoid initials and single letters (B
& L & R, Inc. will be difficult to remember for customers) and try to
say something about the business (Bob’s House of Hobbies is easier to remember
and spell).
Next,
a business plan is a vital step in laying out all the topics and proposals in a
standardized format. A good business
plan serves as a formal statement of the new company’s goals, financing,
structure and legal considerations. It acts
as a “resume” to prospective investors and is the primary documentation they
will use to evaluate if your business will be worth investing into. It also provides the proprietor(s) with a
chance to see the workings of the new business in black and white. A basic business plan should at least contain
a balance sheet, income statement and statement of cash flow, as well as a
proposed financial budget for the first year, or as long a period as necessary if
a year is impractical.
So,
with these quick tips, plan for success, and good luck in your chosen endeavor!
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