Why business plans are so important
If you are starting your own money-making venture in the near future and you are contemplating resigning from your full-time position, it’s time you started to write a business plan.
While you may have a whole host of startup ideas in your head, it’s crucial to get these written down on paper. A business plan isn’t just a massive brainstorm. This should be a working document detailing your goals, aims and financial forecasts for at least the first three years of trading. A business plan needs to be well-thumbed and not just a printed out piece of prose that you stick at the back of a filing cabinet never to see the light of day again.
A business plan should be your bible. It should be with you when you pitch to potential investors, beside you when you are working from home in your office, and on your coffee table while you are taking a break. This document should help clarify your thoughts, work through potential risks and formulate strategies to maximize profits. Take a look at the sorts of things you should be considering when writing your business plan.
The most integral part of your startup will be its financial acumen. Most startups, however small, will need an element of external funding. This could be to help boost cash flow to enable orders to be processed. Or this could be for marketing. Or this could be money needed to help rent a commercial premise. When pitching to potential investors, you cannot wing it and hope for the best. You need to portray yourself as a serious entrepreneur who has a well constructed and well thought through plan.
Within your business plan, you need to work out your financial figures. How much gross revenue will you be making in Year 1? What will your net profit be by the end of Year 3? These are the sorts of questions that your bank manager will be asking if you head to your local branch to apply for a loan. It’s important to understand your financial prowess. Don’t overestimate your financial forecasting otherwise the potential investor you are pitching to will run a mile as they will view you as a bit of a cowboy. Instead, be realistic and consider how you can work to your maximum capability.
If you aren’t keen on heading to the bank, there are other financial avenues that you can take. Consider checking out the local business angels in your area. These solo investors are always on the lookout for startups that they see the true potential in. they will invest in your business if they see it as capable of making a profit and having a long term future. Pitch to a business angel and secure their investment, and you will have a bright business mind and a book full of contacts, as well as their cash. Be suited and booted and be ready to be scrutinized. However, if you manage to secure funding from one of these ethereal business beings, your money-making idea is well and truly validated.
If you are taking the entrepreneurial plunge, you may be overwhelmed at just how many hats you now have to wear. As a full-time employee, you were a specialist. This could have been in marketing or finance or HR. Now, you are the head honcho, the finance whizz, the marketing guru, the human resources manager, the social media nerd and the tea maker. It is nigh on impossible for you to fulfill all of these roles to a high enough standard. This is where outsourcing comes in.
As a business, you want every function within your startup to be exceptional. Take a look at your skillset and keep those functions in house. However, any aspect of your startup that you are not comfortable with can be outsourced to external experts. These off-site specialists can help you conduct payroll or aid your SEO capabilities. If you are trying to compete with your already established industry rivals, you might need to hire a software consultant who can develop ways of making your CRM, your reporting or your appointment making more efficient. With great software, your business can be more productive and profitable.
If SEO is like a whole different language for you, think about hiring an expert to formulate your digital marketing strategy. They will work with you to construct a way of achieving your goals. Do you want more followers on Twitter? Do you want to analyze your website traffic? Or do you want to appear higher up the Google rankings? An SEO specialist will ensure that these aims can happen.
For the more tedious tasks such as payroll, you can free up your time by outsourcing them. There’s nothing worse than having to spend a day each month working through the payroll for your staff. It is stressful when you have to ensure every tax obligation and pension contribution is correct. Instead, outsource it. Develop an outsourcing strategy within your business plan, to ensure that you can budget for it. No longer will you be tearing your hair out over a calculator, and you can spend your time on more pressing aspects of your business vision.
In your business plan, you need to consider how to get your brand noticed. The millennial will choose social media to communicate with their peers and look for solutions to their problems. This is where you come in. You need to be solution-minded in your approach to marketing your wares. Social media platforms are perfect to help get you noticed. By having a Twitter feed, a Facebook page and an Instagram account, you can expose your brand to as many audiences as possible.
Being an entrepreneur isn’t easy. However, it is exciting and allows you to become the master of your own destiny. You need to be organized and have a plan from the outset. Before you even consider launching your startup, you need a business plan that you can hone and develop as you become established in your chosen sector.