May 03, 2018
According to the recent study, entrepreneurs who write formal plans are 16% more likely to achieve viability than the otherwise identical non-planning entrepreneurs. Another research goes even further to claim that those who completed business plans were nearly twice as likely to successfully grow their businesses or obtain capital as those who didn’t write a plan.In each case, it is obvious that you need to prepare well before launching a company. In this article, we will show you how writing a business plan will make you an independent entrepreneur.
How to Create a Good Business Plan
The business plan is a written document that describes in detail how a company, usually a new one, is going to achieve its goals. You can create such document in many different ways but there are essentially 4 segments you must cover. Let’s discuss each one here:
The analysis of market potential is your starting point because you don’t want to enter the game with limited possibilities or too strong competitors. For instance, imagine that you want to sell cosmetics products in your country.
First of all, you should learn about the biggest players in this field and is there a chance to approach any of the existing retail chains. For instance, 5,000 pieces a month.
If you are hoping to grab 5% of the market share within the first 2 years, you are looking at maximum 6,000 units sold within the first 24 months. Is this enough to get you going further? A good business plan has to answer this question precisely.
Once you’ve explored the market potential, you should set business objectives. In general, you could go for 3 types of goals:
- Short-term objectives: How do you plan to enter the market in the first 12 months? You need to know who to address first and where you want to be after a year.
- Mid-term objectives: The business should be growing significantly 2 to 4 years after launch.
- Long-term goals: After 5+ years of successful business, the sky is the limit
You should define the target audience for your products or services. According to sales experts at the resume service online, you have to decide exactly who, where, when, and how to look for. Essential traits of an average buyer persona are these:
- Age & Gender
- Education level
- Income level
- Personal values
- Everyday habits
Mind the financial aspect
Determine your business startup costs to avoid financial issues in the later stages of the project. Count on every cost – from administrative duties and office rent to bank loans and marketing investments. When you put all these costs into the calculation, you can also calculate the profit based on sales predictions and your net margin.
By Stephanie Proper Writer, Blogger and Career Strategist