People with a great idea for a business often turn to a business plan as a logical next step for getting from ‘idea’ to ‘open’. But a business plan isn’t a solution on its own; in fact, there are many questions you will want to answer before you embark on the sometimes onerous task of business plan writing. So how do you know when it’s time to get to work on that plan? Here are a few indicators:
1.You have a clear vision of where you see your company in five years.
Global business domination might be in your future, but many new entrepreneurs are simply looking for a sustainable venture that supports themselves and their families and creates a decent income. Try to envision your life – and your business as part of it – in five years, and define what that looks like. This exercise will help you set goals and objectives for your business plan.
2.You understand the problem you are solving with your business.
Whether it’s a restaurant or a great mobile app, your business serves a need in the marketplace and you have to know what that need is. Once you can define the problem you solve for your customers, you can create a compelling business plan that demonstrates the potential for your company’s success.
3.You know who your ideal customers are.
If you could only have one customer and just clone them over and over, what would they look like? What are their demographics, and their values? Understanding the perfect buyer for your product helps you position your company among its competitors. It also helps you focus your marketing efforts on the people who are most likely to buy from you – saving you time and money down the road.
4.You have some capital to invest.
Not every business requires a lot of funding, but you need some money to put into your web site, marketing materials, and maybe a few online ads to get your first clients. If you’re starting a store and looking for a loan or investment, remember that funders like to see you put your own skin in the game too – and usually, that means they want you to kick in some of the cash.
Once you’ve worked through some of these important considerations, you’re in a much better position to start writing your plan, and you’ll find the task much easier to digest.
Jessica Oman helps entrepreneurs create business plans and financial projections that get them from Idea to Open faster! She’s a writer, consultant, and owner of Write Ahead Inc. in Vancouver, who has helped her clients close millions in financing with business plans they can actually use to guide their growth. Click here to get 5 free tips you can use to improve your business plan right now.