Starting a business is a massive step for anyone to take on. Some people believe that creating a company will be the answer to all their problems. Habitually, they think that no longer having to answer to a "boss," means that things will become much simpler for them. Unfortunately, this is not the case in terms of starting a business. Starting a business requires planning and strategizing. It will take many hours of researching and learning to build a successful business. One of the critical elements of creating a sustainable business is developing a business plan. A business plan will allow the business owner to strategize and plan necessary elements such as the business's marketing strategy, financial forecasts, and the business's form of ownership. Though there are many elements to a successful business plan, this article will cover several of the specifics needed to begin down the right path of business ownership and provide the keys to beginning to develop a successful business plan.
Executive Summary: Who, What, When, and Where
Beginning your business plan by defining the "who," "what," "when," and "where" will allow you to create a solid representation of your business. For this article, we will use the example of a sporting goods store. First, in your business plan, you need to identify your company. For instance, you could name your sporting goods store "Elite Sporting Goods." With this company name, you will want to search and ensure the name you choose has not already been registered in your state. For example, if you visit the Secretary of the State web page in California, you can search all registered business entities to confirm if your name is available. In addition to choosing a name, you will also need to determine whether your name requires a specific designator. The name in California can be listed as ELITE SPORTING GOODS, LLC or ELITE SPORTING GOODS LLC. The comma between the business name and designator is optional.
Once you have determined the "who" of your business, you will want to focus on the "what." What is the mission of your business? What kind of product are you marketing? What are some of your short- and long-term goals? Each of these is a concept that will assist in creating a solid foundation for your business plan. Knowing how to answer these questions will help you as you delve deeper into the business plan process. The three questions that must be answered are as follows:
1. At the beginning of this phase, you will want to create a mission statement. TED talks have become commonplace, and they have a short but straightforward mission statement, "Spread ideas." This is your opportunity to think outside of the box. Maybe you want something that speaks to environmental sustainability or your dedication to charity; either way, a mission statement is a great way to sell yourself in a few sentences or less. Suppose that, the sporting goods store's mission statement might be, "We strive to provide the highest quality sporting goods, while maintaining relationships with the local community and contributing to local community projects."
2. Once you have a mission statement, you can focus on your product. During this early stage, it is not necessary to go into detailed descriptions of the items. A simple message will suffice. For example, Elite Sporting Goods will be a small, locally owned business providing quality sporting goods, generally specific to the current sports season. Here, you have identified your product and even provided slightly more detail regarding the specifics of what you will be marketing.
3. Following the product description, you can give a few short examples of your short- and long-term goals. It is important to remember that short-term goals in terms of a business differ from those we generally adhere to as individuals. A short-term goal is usually completed in 6 months or less in a typical work project or life plan, with long-term goals exceeding 6 months. For businesses; however, a short-term goal can be completed in 1 to 3 years, while a long-term goal is projected to be completed further into the future; for example, 5 to 10 years. One short-term goal could be to earn X amount of revenue within X amount of time, or sell X amount of a specific product before X date. Another short-term goal could be to find a more prominent store location before the third year of being open, or to offer a wider variety of products by finding a more cost-effective manufacturer within 18 months of opening. In terms of long-term goals, you want to focus on the vision. Long-term goals seek to look at the deeper meaning of your business. One long-term business goal could be to have the business grow enough to become publicly traded. It will take years for a business to establish the financials and reputation required to go public; therefore, this would be an excellent example of a long-term goal.
Once you have reviewed the "what" of your business, you can begin to focus on the "when" portion of your business plan. When will your services be available to customers? Here, you want to focus on the actual projected launch date of your business, as well as what hours your business will be open. You may want to set the launch date as 18 months following the completion of your business plan. You may also include that there will be a variety of items as a tradeoff for limited stock at the start of the business. This tradeoff of having limited supply will be worth it because there will be more variety of items; thus, allowing the company to track into the future which items are likely to be more highly sought after than others. This applies to "when" because it will determine when different products will be available to customers. It may be that due to this tradeoff, c