A client recently recounted his experience searching for a consultant to help him plan and launch his small business.

Starting a new business is a daunting task, one to be considered very carefully before proceeding. One should never enter any business, as an owner, unless one already has experience in it, whether as an employee, an associate or one who has some other concrete experience or knowledge in the field. If you don’t have that experience you consider getting it before starting a business.

Most people have considerable knowledge about the business they are about to undertake. However, this knowledge should be organized and quantified early on in the process. This will force one to answer the hard questions to determine if you and your organization have capability to succeed. This is where the business plan comes in. Not only is the plan something that you will need to get financing or credit, but it will provide insight into the key issues that will drive action that will lead to success. And highlight any other resources that may be needed.

The Business plan.

So first, write a one paragraph statement outlining what the purpose and mission of your business is. This statement should define in spirit what your organization is and what it is going to do. Hopefully, it will be one part a market-based attainable doctrine of your mission and one part inspiration.

For the next steps, each section should be answered first qualitatively, and then quantitatively.

A fundamental question to be derived is what your first year revenue will be. For the first step, the question that needs to be answered in detail is “What market are we serving?”. This should be answered generally at first. For instance, if your basic idea is to sell aftermarket headlights to auto body shops, than you may want to define your market as the secondary auto parts market. Of course your initial sales estimates may be limited to one area, but it’s important to identify the broader market. This may provide insight into where future growth may come and what the larger market dynamics are.

You should then estimate what your sales volume will be in the first year. Consider only those resources you feel certain you will have during the year. No pie in the sky. If you are the organization then it is a matter of what you can realistically sell given the resources you have available right now. You should also estimate what your volume will be for years two and three. It is here where it may be wiser to assume growth based on in increased resources based on first year earnings and/or what financing or investment you are likely to receive during this period.

You’ve forecast your volume for the first three years – now you can make some pricing assumptions to complete the revenue picture. For the first year it should be fairly straightforward. You can assume the current market price and whatever changes are known to be on the short-term horizon. For years two and three further analysis is needed to determine what changes may occur in the market, and what the effect on prices will be. Once you’ve made your pricing assumptions simply multiply by your volume forecast to come up with your revenue forecast

Of course, we can delve much deeper into what the underlying factors are in you revenue stream. I’ll leave to a separate article how analyze the market to form ideas on different products, and ways alter your revenue based on what you learn.

The next step we’ll take is to determine what our direct cost will be to acquire each customer. Or to make each sale. For each business this cost could take a different form. This will be the next article in the series.

Starting a business, whether online or offline is not exactly easy. There are so many things to think of and so many things to do. You have to have enough resources, a good venue, a market to capture and enough workforce to start with. And as if you need more, you also have to worry about licenses, complicated paper works and other permits. To someone who is a novice in all these things, it makes starting a business quite a scary thought. But that scary thought is something that can be subdued by writing a business plan. This plan puts everything to order like your company profile, objectives, long and short – term goals. However note that writing this plan is also not easy. You have to do research and you have to put your thought in to it. You have to follow a certain format that will put everything in perspective. Luckily enough, you can find business plans examples or even templates if you just know where to look.

So where should you start looking you ask?

There are two places where you can find business plans examples. One is in the Internet and two – in books.

The Internet is a good source because you can find business plans that will tailor fit any industry that you may want to get into – be it a food business, boutique or service – based venture. With samples in the Internet, you can also find plans of thriving businesses. And to someone who is just starting out, checking out plans of successful businesses can greatly help with goal formation. Another plus is that, you can also find free templates that can have you get started as soon as possible.

Then again, if you want to do things the old way, you can always get back to business books to find the samples and the guidance you need. To some people, this works better because the classical business perspective can always give a modern entrepreneur something to learn.

Now that you know where to look – here are some reminders before you get started with your business plan.

1. Start off with one clear goal. Know exactly where you and your business are going. It will also be best for you to plot time frames as they are always good because it keeps you going no matter what.

2. It is always wiser to start small because when you have a small business, the possibility of expansion is quite fast. On the other hand, if it turned out that your venture is not that successful, you have lesser things to lose.

3. Focus on one product and capture one specific market first. If you want to put up a bakery, then start with a bakery, do not try to make a restaurant happen with that. This is important because trying to do so much will just thwart you off your goal.

4. Finally, try to enjoy every moment of it. That is the only thing that can fight off any exhaustion and frustration that you might feel while running your own business.

Those are general reminders that you can keep in mind while you start working on your business plan. Again, if at any point of writing, you get to have a mental block, you can always browse on some available business plans examples for your reference.

If you are starting a business you must start with a plan. If you don’t, you will probably run into stumbling blocks pretty quickly. A business plan will help you plan for the future whether it is in two weeks, two months or two years.

A plan will help you establish things like the business location, how many employees you expect to have, how many things you need to sell before you break even, how much profit you expect to make and what your target market looks like. These things are all important when establishing a business plan.

You should use a simple business plan template to save time and money. You can get hold of a template online pretty easily and there are plenty of places where you can buy professional plans that will form the basis of your plan.

If you do not set up a plan you are likely to find that your business will have little direction. One of the most important things in business is to have a direction and this means finding the right direction to head in and then going for it. A plan will force you to think about things like this and enable you to look to the future.

A business without a plan is like a bus without a driver. You need to be able to point your business in the right direction and having a good simple plan will do this for you. Take the time today and create a plan from a template and save yourself headaches down the track.

If you have decided to start your own business, one of the first things that you need to do is to work on a business plan. A business plan is so important because it actually serves as a compass for the direction your business will take in the future. Having a plan will also help you achieve the things you want to achieve and will help your business to find success as well.

Consider the Details

One of the reasons that having a business plan is essential is that it will help you to consider the details of your business and its’ future. As you are working on your plan, you will probably find that there are many aspects of your new business that you have not considered. Getting started with a business plan will help you to save money and time since you will be able to deal with issues before they become a problem.

Helps You Get Funding

Another great reason for having a business plan is that it can help you if you are trying to get outside funds for your business. Most lenders and investors want to see that you have a clear business plan before they take a risk on your business. Having a plan already drawn up shows them that you are serious about being successful at your business. If you are going to show your business plan to potential lenders and investors, make sure that the figures you use are accurate so your plan is credible.

Management Tool

Starting a business is a huge job and it is helpful if you have something that can help you manage the business. A business plan can act as a management tool that can help you focus on where you are and where you want to be in the future. This will help you to keep your daily tasks well managed and will also help you to accomplish long term goals as well.

If you decide to go without a business plan, chances are that your business is going to end in disaster. You can use a business plan throughout all stages of your business to guide your business towards success. While it may take some time and energy to get a business plan together, in the end it will be well worth taking the time to get it done right.