For the average entrepreneur:
But can you commit all that to paper? And even if you could, why bother with a business plan at all?
As in creating anything from the bottom up, you need a blueprint. How will you know when you are finished if you don’t set a goal and create a plan to reach it? How will define your business idea to a prospective lender, customer, or investor?
If you don’t assign value to each aspect when building your business, how will you make reasonable and realistic financial decisions? Are you in a position from the onset to form your business according to your vision, or will you just be reacting to conditions as they occur?
So, where to start?
Keep it simple. Begin by describing the business as it exists in your mind. When you use the following outline as a guide, and can easily address each point, you have a business plan.
• What product or service you will offer?
• Into what industry do you fall (NAICS code)?
• Who will use your product or service?
• How you will grow the business?
• Who will be involved in the business?
Target market - describe those most likely to purchase your product/service:
• Based on your knowledge of your target market:
- how you will reach them
- get them to come in
- satisfy their needs and wants
• What forms of marketing you will use:
- social media
• What portion of your budget will be devoted to marketing?
Products and Services:
• Detailed description of products and services
• What they will do for your client/customer
• Pricing Strategy
• How your products and services are competitive
• Who in your organization is doing what
• State your legal entity: sole proprietorship, LLC, corporation
• What licenses and/or permits are required
• How does your day-to-day operation flow
Remember that target market you identified as customers most likely to purchase your products/services?
Now, couple that information with your pricing strategy to determine projected sales revenue with the following simple formulas:
• Customers X amount spent per month = monthly revenue
• Monthly revenue – monthly expenses = monthly profit
Because you have researched your target market, you will be able to make reasonable and realistic income projections for your first several years.
Remember, keep it simple to ensure you are building your business, your way.
Article By former SBDC Business Advisor Nancy Ansteth
The Onondaga Small Business Development Center (SBDC) will offer clients the option to meet in person BY APPOINTMENT ONLY, following CDC Guidelines. Click here to get COVID-19 Resources.
Read articles and advice written by our very own Onondaga SBDC Business Advisors!