Whether you are starting a small company or researching ways to expand an existing one, a business plan is a significant tool to help guide your decisions. Consider this as a roadmap for success, providing better focus on all elements of your company, from finance and marketing to operations and product/service details.
While some owners might be tempted to leap into start-up mode, writing a business plan is a critical initial step for budding entrepreneurs to inspect the viability of a company before investing too much time or cash. The goal of a business plan is to help announce a plan for starting your company. Additionally, it offers insight into steps to be taken and resources needed for accomplishing your business objectives, along with a timeline of expected results.
For existing small companies, a business plan should be updated yearly as a means to steer growth and navigate expansion into new markets. Your strategy must include explicit goals for hiring new employees, market analysis, financial projections, and potential investors. The goals should indicate how they will help your company grow and thrive.
Deciding if You Need New Resources
Committing funds to finance advances and new resources such as computers, software, or cars/trucks is never an easy decision for budget-conscious small business owners. However, a business plan may bring awareness of the process of whether to purchase or rent and help decide the appropriate amount allocated to these resources. A good business plan can also help you determine if you can afford the additional office, retail, or workspace.
Developing a Marketing Plan
Marketing and market potential are significant aspects of a strategy for aspiring small companies. “I added the potential advertising demographic of those who lived in a specific area of the town,” explained Scott Sulzer, who opened the Sandwich Joint cafe in downtown Los Angeles in 2009. “My aim was to capture a specific proportion of those people who worked and lived near.”
Created mainly as a marketing tool, Sulzer’s 10-page plan included topics such as target audience breakdown, marketing plan, and market insight. “My business plan was mostly about market projections,” he explained. “How are we going to find those people who cause a growth in our daily sales? And how are we going to reach them to tell them we are here?”
Seeking Investment for Your Company
In addition to providing a roadmap for growth and a marketing plan, your business plan may also be significant in securing funding. Whether you are seeking a credit line from a bank or an influx of funds from investors, a business plan that answers questions about sustainability and revenue generation can make the difference between whether someone decides to invest – or how much they may decide to invest.
Hiring the Right Talent
A business plan may also be required to maintain other services, such as landlords, lawyers, consultants, or accountants. Sulzer used his business plan to secure a lease.
“I needed to have a viable document they could trust,” explained Sulzer, who rented from one of the largest landlords in downtown Los Angeles. “With a corporate partner, they wouldn’t deal with me unless I had a business plan. I had to submit my entire information and a plan that presented what I wanted to do, with financial breakdowns and percentages, demographics, and how I was planning to get customers.”
For a small business to succeed, attracting talented employees and partners are of crucial importance. A part of a business plan’s function is to help bring in the right talent, from the executive level to professional employees, by showing the leadership and growth potential of the company. It can also help secure vendor accounts, especially with exclusive providers.
Setting Goals for Management
Finally, a business plan can be significant in providing structure and management goals to a small business. It can become a benchmark tool to keep control on track with revenue goals and operational targets. When used correctly and consulted frequently, it will be able to help you measure and handle everything you are working on so tough to produce.