Planning is the most important step of starting a business! Your business plan serves as a guideline in achieving your desired success. You are starting your business because you have a wonderful service that will enhance the lives of others. Your service to others is your passion, not business planning. That doesn’t mean you can skip this step. Look at it like this… it’s the tool that will allow you to make a living doing the things you love so much that you would do it for free.
In the planning process, you will analyze possible threats and opportunities, flush out the market demands and trends, as well as strategize on the best possible resources to use in order to set your business up for success. All of these discoveries and strategies are recorded in your business plan.
A business plan, in simple terms, is an outline of the business that provides information about the products, markets, assets and financial sources. Your business plan provides the needed direction and focus your business needs to begin with structure and realistic expectations. It is such an important tool for businesses of all sizes.
Your business plan serves two main purposes:
1. To define your business and strategize how to actually make money doing the thing you are passionate about.
2. It serves as a tool to measure progress.
Having a business without a strategy for serving and attracting paying clients is what I like to call having an expensive hobby. You can save yourself a lot of stress and heartache if you have a systematic approach for establishing and growing your business.
Think of strategy in two forms:
The first is how to strategically place your business within the existing market. You must know how you are different and similar to others within your industry, both local and national if appropriate.
Now that you know how you fit within your market, the second component of strategy is your plan of attack for penetrating the market. How will you inform your target market of your services and the results that they might expect from working with you instead of your competition?
For your first year in business, I recommend that you review your business plan quarterly. Since you are still establishing a business rhythm, you likely haven’t set up a review cycle with your sales/technical team. The two primary areas to review are your sales forecast and your balance sheet. If you don’t have a balance sheet yet, track your profits and losses via a P&L statement.
By reviewing these two areas, you can track how much money is moving through your business. It allows you to ask yourself additional questions like: Did I budget appropriately for the web developer? How much can I continue to do myself? At what point can I afford to bring on part time resources such as a payroll company to process new employee HR issues and quarterly tax estimates?
Reviewing quarterly allows you to remain agile and make adjustments before issues become detrimental to the success and sustainability of your business.
Your business plan is a tool that, if properly developed and reviewed regularly, will serve as a roadmap for your success.
Ammie’s Assignment: Schedule time to review your business plan quarterly. Schedule all four reviews for the entire year right now. You are more likely to follow through with the review if it’s built into your schedule.