Part 6 of this ongoing article dealt with choosing a company name and registering the name with the state where you plan to be established. In Part 7, the question is “Now what?” So far, I have my tools loaded into my computer. I have created a foundation for the business, legally. And, I have chosen to pursue information product publishing combined with some affiliate marketing. At this point, I need a blueprint to follow to build my business. I need to develop a business plan!
What Is A Business Plan?
A business plan is the definition of your goals for your business over a specific length of time. A business plan should define your goals over a 1 year, 3 year and 5 year period . To write your plan, start by defining your first year of operations. Make a prediction for your company’s earnings in the first year. Then, describe how the company will achieve that financial goal. Create milestones to reach the goal. Be as specific as you can to show how you will achieve each milestone. Financial goals may be broken into quaters of the year, while physical goals, like product creation, might be broken down into phases. Next, project how your company will grow over 3 years. Will you hire employees? Will you seek investors for expansion? Will you acquire a competitor? Break out the goals and fully describe the way you plan to grow in your second and third years. Finally, state your 5-year goal and again elaborate on how you will meet each milestone. By the time you have written this detailed business action plan, you will have a very precise step-by-step strategy to get to your destination.
Why Write A Business Plan?
Even though you are starting an online business, writing a business plan is not optional! It is necessary to be successful. There are two strong reasons for writing a plan. Key articles that I have read suggest the first reason is a psychological reason. When you state your goals for your company and write them in a report, you make a commitment to do something at a certain time and you start a subconscious process to make your plan a reality. You also take many random ideas you have about how your business will operate and refine them so that the method of operation flows well. You define your purpose and you know what you have to do to achieve your milestones. You start to develop analytical thinking skills that will help you run your business in the future. The second reason to write a business plan has to do with attracting investors. Most investors want to see your plan before they will invest a dime in your business. Over time, you may seek capital investors for many different phases of your company’s development. Your business plan will be the basis for all those financial proposals you submit to banks, private companies and the government.
Using Business Plan Software
Although you can hire a business planning consultant to write a business plan for you, try writing your own plan particularly if you are seeking capital under $200K. Using a business plan software can help to expidite the process. Writing your plan yourself with a software package is beneficial because you will be writing a plan that lenders and investors will accept, without you having to gain a lot of knowledge about what must be included and how it should be organized.
One of the most popular business plan software packages is Business Plan Pro by Palo Alto Software. The software is easy to use and comes with over 500 business plan templates and two free books. It offers business plan formats preferred by the SBA and major lenders. It has built in charts and tables and it interfaces with Microsoft Office and SecurePlan.com. While there are a few other software packages on the market, Business Plan Pro is one you should look at.
You can use the software to guide you through the important questions you need to answer. Experts say if you are seeking funds above $200K, you need to have a very polished business plan. If this is true for you, take your self-written plan to a business planning professional to get further advice. Someone who has experience writing business plans and dealing with financial professionals will be able to fine tune your plan by suggesting what information to emphasize.
Free Business Planning Advice
Another great place to get free advice and information about business planning is the U.S. Small Business Association (SBA). If you want to get free advice and more information on all aspects of starting a business and business planning, this is a great place to start. Created in 1953 as an independent agency of the federal government, the SBA aids, counsels,assists and protects the interests of small business owners. They offer free online training about business planning and you can also sign up for newsletters about events in your local area, regulatory news, and trade research information. See their video on how to write a business plan!
Just remember, your business plan is only a roadmap for your journey. You should expect bumps in the road and some unexpected side trips and detours. You may find yourself making revisions to your plan as you learn more about your chosen business. Don’t be discouraged if your first plan needs adjustments. Plans are never perfect, but writing your official business plan will keep you from losing your way completely.
When I started my company my business plan was a life saver. I had mine professionally written but I think that was a mistake. I could have saved money doing it myself. I wish I had!