We know you have a passion for your business and can’t wait to get it off the ground. But being an entrepreneur is more than renting space, stocking shelves and putting up an “open sign”. You may know what you want to do but it’s more important to know how you’re going to do it. This is why a business plan is so important for your company. It’s your life line for when the entrepreneurial world doesn’t go the way you expect (hint: It rarely does).
Here are the prime components of a business plan as recommended by SCC Business Advisor John Clement.
1. Executive Summary & Purpose:
Two sentences describing why your company exists and what it hopes to achieve.
2. Mission & Vision Statement:
A few more sentences describing the goals of your business. Ex: Our magazine will have a circulation of 800 by February, 2013.
Answer these questions:
- Who wants to buy your product? Include demographics.
- What other products could they use instead of yours?. Why will customers choose your product?
- Who are your competitors?
- Who could you potentially partner up with?
The typical financial section includes
- Desired/expected Loan amount
- Pro Forma Cash Flow Model: detail = accuracy
- Break Even Event-àCash Flow positive
- Use of Professionals (Accountant, Attorney, etc.)
- Personal finances—separate vs intermingled
I’d love to tell you more, but I think it’s best to leave it to the expert (John Clement) to explain in a personal coaching meeting. Math never was my thing. Don’t worry if you also have trouble with numbers, John is more than happy to help!
Here’s one you probably didn’t think of. How are you going to get rid of your business? It could be in forty years when you retire, in four weeks when you get a better offer or six weeks when your business goes under (unfortunate, but it does happen).
This where you ask yourself serious questions about how to abandon a sinking ship before it takes everything- your life savings, your credit score, etc) with it.
- How/when do you plan to leave the market? (sell through a business broker, transfer to a dependent, liquidate stock but maintain a controlling interest, etc.)
- What is your financial expectation (dollar amount) you intend to take away as you depart? (ie, How much do you need to exit comfortably?)
This is just a brief over view of what you need to think about before starting a business. For a more in-depth look at the plan contact us to set up an appointment with a business advisor. We’ll get you sailing straight on the path to success.