It’s exciting when you have this brilliant idea and you just cannot wait for people to wear your brand or eat your signature cherry pie. You see the finish line. You dream about cutting the ribbon and having a soft launch for family and friends. That is all great. However, just press pause for a bit. Before you get to the grand finale of opening day, there is some important work you need to do to start a business.
The first is to create a business plan. It is a crucial document because it gives you and your investors or partners a snapshot of your idea and growth plans. You can make a very detailed plan or keep it relatively simple. However, there are a few things you should include when finalizing a business plan.
1. Start With a Skeleton
First things first. You need the framework on which to build your empire. Look online for a business plan template for your industry and go from there. You may have a name that you love for your business, but you must make sure it has not already been taken. When you register your business as a limited liability company, sole proprietorship, or partnership, you can check if there is another business by that name.
You will also have to check if the domain is available. If your top choice is taken, don’t lose hope. You can either tweak the name or change it completely. Your heart may have been set on something, but you will eventually warm up to the other one also. Once you have the company name and legalities out of the way, start filling out the other sections of the business plan. You may need to get help from your accountant or supplier for some numbers so that the projections are accurate.
2. Include Thorough Research
A good business plan should include market research. Whether you did it in-house or hired a company to conduct it, study the data and share the key findings. Depending on the product or service you plan on selling, you might have conducted quick online or in-person surveys with just a few questions like how many times a week do people in your target market wash their hair. You can find out if they prefer separate shampoo and conditioner or 2-in-1 solutions. You can see if your target audience uses tools to style or dry their hair. All these answers can help with your marketing and advertising if you’re selling hair products.
Or you could have conducted in-depth interviews and focus groups. This gives your business more insight into consumer spending habits and preferences. In focus groups, respondents are often compensated for their time and are encouraged to give honest reviews and feedback as they might not even know which brand is sponsoring the study. They could just be talking about different types of soda and why they are loyal to a particular brand. Find out if they switch if they see a competing brand on sale. What do they do if a restaurant does not serve their top choice? Some business plans include market research findings from competitors too.
3. Highlight Your Product or Service
Now that you have set the stage by describing what the target market likes, you can introduce your hero. Showcase what your unique selling proposition is and why people would like to invest in or support your idea. There might be several bakeries in town. However, you can showcase how your French bistro style with European recipes will be something unique in the area. Include mood boards of what the café will look like, the menu, seating, prices, and other details. Some venture capitalists like to invest in people, not ideas, so share a little bit about yourself as well.
If you have had success by sampling your product line at expos and fairs, include that information too. Highlight the bestsellers and include what other variations can be offered in the future. Sometimes people think their new business idea must be something no one has ever thought of. That is not true. There is always a new pizza place or T-shirt brand coming up. Each has its own USP and target market.
4. Crunch the Numbers
To survive, businesses cannot rely on just great ideas. The numbers must make sense too. Calculate a thorough estimate of the next year’s projected income and expenses. If possible, do it for more years too. See when you will break even. Keep predictions realistic. Account for inflation and have a best-case and worst-case scenario. Consider the various third parties you’ll need to hire in order to succeed, like IT consulting services or bookkeeping management. Come up with the figure needed to open the doors to your business. Then share the figure needed to keep it afloat for the first year at least. Include salaries, overhead, rent, utilities, supplies, and marketing.
If at this point, you feel your business may not be viable, do not despair. Go back to the drawing board and see how you can make adjustments to make your dreams come true. If you do not have the funding to open a brick-and-mortar pet grooming studio, try a mobile grooming van first. You will need far less capital and customers — and their pets — may prefer someone coming to their home. Make some solid connections and then decide if you need to open a physical location or get more vans and service a larger geographical area.
Executive Summary
Even though this is the first thing in the business plan, it is often written last as it is a synopsis of the whole venture. Once you have your business description, market research, and math, summarize it for readers. Think of it as an elevator pitch where you only have two minutes to share your brainchild. Make every word of the executive summary count as some busy investors may not even read everything after it. Make sure your passion shines through, but splice it with a healthy dose of reality and evidence with numbers.
