In Part 1 we went through how to become a business owner, or at least what you should consider before doing so. What now? How do you progress from an idea to an actual business?
Part 2: Writing a business plan
Writing a business plan can help immensely with this transition. A business plan forces you to think about the market your business will operate in, how you will finance the business, how the business will operate and more. Once you start writing down some of these issues and potential solutions, the path to success will begin to take shape.
It is widely acknowledged that a significant portion of small businesses fail in their first few years of operation. New businesses can fail for a raft of reasons but a common theme amongst those that do fail is the lack of a clear vision of the strategic goals of the business.
I am continually astounded at how many businesses I come across without even an informal business plan, many of which are directionless and trying to do too much in too many areas. One saying that I have remembered from an early age is that you can’t shoot a basket without seeing the ring. In other words, how can you end up where you want, when you don’t know where you want to end up?
Ask yourself – can you succinctly describe the essence of your business (or potential business) and the strategic goals in 15 seconds or less? If not, perhaps a formal written business plan would help you to focus on the areas of your business that are critical to success.
Many business owners are hesitant to take the time to prepare a business plan, as they believe a business plan needs to be a long and detailed document prepared by a team of professional advisors. In reality, it can be (and usually should be) a simple one page document outlining your strategic goals and how you will achieve them. If the document is too onerous, the value it brings to the management team is diminished as the emphasis is lost in the detail.
Whether you are starting a business or already have one, the value of a business plan is well worth the time you invest to write it.