Congratulations! Deciding to start your own business is an exciting adventure full of ups and downs! While there are many books and programs out there on how to start your own business, we wanted to give you the quick and dirty ‘Know How’ on how you can create a business plan and present it to interested parties to get the go ahead to move forward with your dream!
White Board It
When planning out your business you should use a white board, notepad or whatever you have handy, but write out your ideas. Writing out your idea will give you a chance to start to develop your action plan. An explanation of your idea for either a product or service should be able to be kept to a couple sentences, like an ‘elevator pitch.’ You want to be able to convey enthusiasm and the product or service in a short effective manner.
Detective or Entrepreneur?
Gather all the information you can about your target audience and what they are willing to pay for your service or product. If someone else already sells what you have, do some digging get some costs on what they charge customers. Being the lowest price product or service is not always the best place to be. Being known for a good product and a fair price is where most businesses want to be.
Cost It Out
A little algebra can go a long way! A simple cost analysis can help you determine if what your customers are willing to pay will provide you with a profit after you have paid all the necessary business expenses. If you are not mathematically savvy there are programs that are out there to help you out. SmartSheet.com offers a cost analysis spreadsheet to help people do an overview on the issue.
When to Delegate or Not
Knowing your own worth is important not only to your pocket book, but your sanity as well. Of course mopping the floor should not be beneath you as an entrepreneur, but after a period of time it should be more beneficial to have you selling your businesses services or products over doing menial work around your business. Create a list of what you can do yourself and what can to be delegated out to someone else to ensure your business is the most efficient it can be and also profitable.
While most people are keenly aware of the challenges they face, it is important not to ignore them. You need to openly think and talk about what hurdles your business may face immediately or down the road. Don’t worry if you feel like there are challenges, all businesses face them and it shouldn’t deter you from pursuing your business plan. Challenges should never be lack of vision but rather speed bumps that may encourage you to work a little harder to get to your goal.
Challenge One: Competition
You might think that having competition is a bad thing, and it really doesn’t mean that. Giving your customers options for ‘like’ services can actually build up both organizations. Just because one company exists does not mean that you and your business cannot be successful in a ‘like’ endeavor. You can look for what you can do better than your competition and draw customers’ attention to that.
Challenge Two: Financing
If you have never written a business plan before, don’t worry. There are many tools you can use to help you get something put together. If you have expendable income you can hire someone to help you write the plan. However most people starting business do not, so they have to figure it out for themselves. This is actually a good skill to learn as your own business owner, you will likely not have someone you can ask for help on a lot of issues and you will just have to figure it out on your own.
Many people believe that if they have debt from college or elsewhere that they will not be able to get a loan to start their business. This is just simply not true. With enthusiasm, decent credit and a good idea financing can be done. You can finance with an investor to get your business up and going. You can finance with a bank. Both of these options do not expect you personally to have zero debt. Americans do not live with zero debt. Having debt should not deter you from pursuing your business. With a good business plan financing approval is within your grasp.
Challenge Three: Make It Official
Whether you go online through LegalZoom.com or FormNet.com you can the documents you need to file for your legal entity. Understanding what kind of business depends on how many people are involved. Is it just you? Are you a sole proprietor? Is it a partnership? Making your company official will enable you to apply for financing in your company’s name versus your own. Getting through all the paperwork depends on your location. You likely need to apply for a FEIN, a Federal Identification Number. This is like your businesses social security number. You need to also apply for a sales tax license if you are selling goods or services the state will collect a tax on the sales. Check our your states department of revenue website to apply for a Sales and Use Tax License. Depending on your business you may have other licenses that you need to operate your business be sure to apply for all before opening for business!
Whenever you enter into a new venture it is important to protect yourself and your family in case things do not go as planned. Use of an LLC, limited liability company, can help protect your personal property. You will also want to consider what kind of insurance coverage is needed to protect yourself and your business. Most any insurance company can either sell you business insurance or they can direct you to a company that does sell it.
The SBA.gov, Small Business Administration, has templates you can access online to help you get a basis for what to include in your business plan. There is no requirement on length of a business plan, but it is important to have key factors included in it. Also a business plan is living and breathing document that should be forever changing to grow with the company. You likely will not write it once and never touch it again. You will write it and revisit it regularly to see if you are on sales targets, growth targets, expenses etc. It is essentially your company’s first budget. Now you’ve got your vision, your plan and financing figured out. Now Get Going!