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Creating a Business Plan from Scratch
If you are looking to start any type of business, it is a good idea to create a business plan. Even if you do not require funding, it will help you research and make sure that you truly know what you are getting into. People will write a business plan for a business that does not require much of an investment and they will write them for businesses that are multi million dollars.
One of the first things to remember is that no business plan is alike. The one you write may not be exactly the same as the one the next person writes and that is okay. As long as you are including the relevant information, that is truly all that matters.
As with anything, you need to start with an introduction. It introduces your business, your vision and your goals. It needs to be specific such as “I plan to open X store which will become the leading source of these products within 5 years by offering great customer service and classes to utilize this product”
Forecast of Sales and Costs
You may be wondering how to figure out your revenues and costs before you have even opened your doors. Here is where research comes into play. Costs are likely easier to figure out so you can start there. Determine what your fixed costs are going to be – rent, utilities, website, hosting, credit care machines – as well as those costs that may be a onetime cost – tills, computer, shelving. You should do a forecast of a year for your business. You can create a few more years but expect that they will end up changing.
In researching suppliers, you should have a rough idea what products are going to cost you and what you are going to sell them for. So for instance, maybe you plan to mark everything up 30% you can then use that to come up with revenues. Month one you may expect revenues to only be $1,000 and that is due to having grand opening sales with discounts; month two you may expect to sell $2,000. Remember to include the cost of the product in your monthly cost estimates as well.
Do not be surprised if you end up in a loss for the first couple of years. That is normal for most businesses as it takes time to establish yourself and pay off those opening costs.
Keep your estimates conservative. If nothing you sell will cost more than $50, it is not realistic to expect to sell $50,000 worth of product in the first month.
How are you going to let people know that you are in business? How are you going to make sure that they remember you in the future and come back?
There are some items that are pretty much a given these days and your customers will expect you to have such as a website or a Facebook page or both. You may consider a Twitter account, a newsletter – both printed and email, or flyers that can be delivered.
Have you already created and sold any of your product? How did it go over? Did people come running to you wanting more for friends and family or did you never hear fromt them again? Market research can be very helpful to determine if you have a good product and if it will sell and how you can best sell it.
Marketing is something that requires a lot of thought as you can spend a lot of money and get no return on it.
Another aspect of the business plan is your competition and how you expect to differentiate yourself. This may be one of the hardest aspects to your plan as you have to evaluate your local competition as well as any online competition you have. You are not able to see into the crystal ball to see what they are doing and how it may affect you so you will need to make decisions now based on what you are able to see.
This is where you discuss if you plan to offer something unique that the other stores do not offer and explain how and why you are qualified to do this. Assume that whoever is reading your business plan knows nothing about the industry and explain it all.
Do not forget to consider how your competition may keep you from succeeding. What happens if your competition decreases their prices? What if they expand their services to include the ones you are offering? Do not forget that they already have a reputation – how will that affect you starting out?
Another aspect to your business plan is to include information about those involved. If the business is a sole proprietorship with only one person, you still need to do this section. In it you discuss what your skills are in this area and why you are qualified to open this business. You maybe have a degree that relates exactly to this type of business and now you are putting it to work. Maybe you have worked as an employee in the industry for the last ten years and now you want to run your own business.
Do not be afraid to mention your limits in this section. You could say that you are not capable of doing the books but that one of the partners will be doing that or that you will be outsourcing it. If outsourcing, the cost needs to be added to the financials. If you are going to learn, remember that your time will be precious and it may be best to outsource instead.
Even if you do not plan to show your business plan to anyone, it is a great idea to do one up as you will find weaknesses as well as areas you did not even consider as you do the work. This will allow you to consider and address them before they end up causing you any problems in your business.
When you are ready to sit down and actually write your plan, there are many websites that can help you with specific examples of plans or even step by step guides to help you with the process. Be patient and take your time and expect lots of revisions.