Forming a Business Plan

22 April, 2009, 7:35 am

Step One of  starting your business is to form a Business Plan.  I have said this before, but I am going to say it again because it is a model to live by.  My Dad used to tell me to “plan your work and work your plan.”

The first thing you need to do is plan your work.  Normally you use a business plan when you are looking for investors and you need to show them that you have done your homework.  But frankly a good business plan is helpful even if it is just you working in your underwear.

I sometimes talk with people who have been working in their business for almost a year with no idea of where they are going and how they are going to get there.  You can’t let that happen to you.

So Here are the elements of a good business plan.

Market Research

You need to do a little bit of research and know your market.  People sometimes say to me, “I want to sell tennis rackets” or something of that nature.  Well, That’s Great, but to who?

You really need to know the “who” of your niche.  You need to know who you are going to reach.  A lot of start-ups hope to sell everything to to everybody.  This is doomed from the start.  Do you really think you can be walmart?

Define your market. Ideally for new business owners the easiest way to do that is to define a market that they themselves are in.  This way you know a little more about your ideal consumer as well as your products.  You ARE your ideal consumer!

Whatever you choose, if you are planning to sell on the internet, it is a good idea to turn to wordtracker.  Wordtracker is probably the best online research tool available.  They show you what kinds of searches are done for everything you can imagine, and they give you a good idea of what sort of interest you can expect for a given keyword.

After doing your research, write out a few paragraphs about your market.  Who are they?  What are their interests?  Their needs?  Their hopes and dreams?  The answers to these questions will be very different depending on who you are reaching.

Your Company

Write it down.  You think you know.  Especially if you work from your back bedroom, but you don’t.  I have tried this exercise with some people and when they went to write out a description of their company they realized how vague their ideas were.

What is your web address?  Who is involved?  Married couples?  Who will be responsible for what aspects.  Sometimes Husbands and Wives team up in a new start up.  Who is responsible for which aspect of the business? There is accounting and legal, marketing, design, analysis, tons of things to consider.  Who will do what part?

At this point, especially if you are a solo entrepreneur, you should make a schedule.  What hours of what days will you devote to marketing and what hours will you devote to administrative?  There are some important things to consider here because you need to think about peak times in some of the social networking sites.  But that is another issue.

Marketing

How do you plan to market your products or services? Are you just going to Optimize your website for the search engines and hope Google does the rest?  What about link exchanges? Do you have a strategy for reaching the social networks?  You better get one.

Write it all down.  Take the time to plan what you intend to do to optimize your marketing and later when it is time to implement it, you will know exactly what to do.

Mission Statement

I have saved this for last, but it should go first.  The reason I saved it for last is because you will be better prepared to create a mission statement after going through the exercises above.  In one sentence, what is your reason for existing? Why another company?  I have heard people say “to earn an income” was their mission statement.  I have harped enough on why you need a larger purpose.  Suffice it to say here that you need some way of communicating why you should exist.

This mission statement will give your customers a reason to trust you and it will give you meaning.  Making money simply isn’t reason enough to start a business. If that is your only reason, you will certainly fail.  You absolutely MUST come up with a mission that serves your clients, or you might as well shut down now.

The Mission Statement of my business is: to provide small businesses the resources, information, and motivation they need to become successful and self sustaining.

Like any good entrepreneur I have about 15 independent projects running together at any moment, but this mission statement keeps me going, and it helps me focus my energies on what I do best.

Do It

Before you read any more, or surf to another site, stop, open up word and begin your business plan.

Subscribe to get future updates to help you improve your business.

For more resources on forming a business plan you might find complete business plan secrets to be helpful

More on this topic




Leave a comment