Starting a business can be one of the most exhilarating, challenging, and daunting processes that you'll ever undertake. When you sit down and begin to think of all the things you'll need to do (or have done) just to get the ball rolling, it may even seem a bit overwhelming. And if you arrive at the conclusion that you're going to need outside financing, that's when the fun will really begin. Finding the money to fund your dream is a task that will force you to take a good, long evaluative look at that dream and put it into a substantive form that potential investors can judge. The best way to accomplish this is by the preparation of a comprehensive business plan.

At first, the most difficult part about writing a business plan may simply be summoning the energy to get moving. When starting from scratch, the thought of putting it all together might seem a bit intimidating, and this in itself could slow you down to an absolute standstill. But once you overcome the initial inertia, you're likely to find that composing the plan isn't as difficult as you thought. To begin, just describe the idea for your product or service, and the business that you envision necessary in order to make it available to the public. You'll also need to identify your target market, and explain the stage of development that your business and your product are in. And don't be too concerned or discouraged if you get stuck at any particular spot. Move on, and come back to it later. This is just a rough first draft, and you'll have plenty of opportunity to return and expand on any items that need more attention.

While you're composing and putting together your business plan, you'll need to keep in mind exactly who you're intended readers are going to be. For example, let's assume that your intention is to take your company public, so your plan's target audience will necessarily be equity investors (in other words, you'll be offering stock). As such, you'll want to stress your company's huge upside profit potential. But don't neglect to adequately identify and disclose the risks and uncertainties of your proposal, because investors have been known to seek judicial remedies if their investment funds evaporate unexpectedly (more on going public in a moment). Conversely, if you'll be trying to obtain funding by way of a business loan (or, debt financing), your emphasis should not be so much on profit potential, but instead on the certainty that the loan will be repaid. As a matter of fact, talk of huge profits may actually inhibit some potential financiers, because high rewards are generally correlated with high risks. If, however, you're writing a business plan simply to help you run your operation more effectively, it's quite all right to omit completely or compose simple sections with general company and industry information. You can then focus the majority of your attention on the areas of your plan that will be of the most use to you.

Before going further, it might be prudent to talk a bit more about taking your company public. Although in no way meant to discourage, you should think very carefully before following this course of action; and then when you're certain, consider it through once again (this especially applies for both small and new businesses). It's true that there's a certain attractiveness about one's company making a public offering, and U.S. securities laws have changed over the years to make it easier to take a small business public. Nevertheless, you would do well not to take this avenue lightly. Many business owners have grossly underestimated the incredible amounts of stress and anxiety that can be generated by taking a company public. Furthermore, there are a number of hidden legal issues involved in operating a public corporation. For example, you'll have to watch your tongue very carefully; any public statements you make (or fail to make) about the company's future earnings could be used as fodder against you in a court of law. There are more than a few lawyers around that make a great living by suing small companies when their quarterly corporate earnings don't quite live up to stated expectations.

Now, back to our subject matter. Generally speaking, the first half of your plan should be focused toward developing and supporting a solid, reasonable business strategy. Take a good, hard look at the industry you're operating in, the market you'll be competing in, your competitors, and your expected customers. Look at the benefits and drawbacks of competing products and services in light of the customer's needs. Search for market opportunities by carefully evaluating competitors' strengths and weaknesses. These steps will help you to effectively zero in on and develop a strategy for your operation, so spend a considerable amount of time in this area.

The second half of your business plan will largely be an explanation of how you'll go about executing your identified business strategy. All the various aspects of getting your business to run successfully should be closely tied to the strategy, including your products and services, your marketing program, and your day-to-day operations.

While you're developing your strategy and how to implement it, keep in mind the nature of free enterprise. More simply put, remember that in order to compete successfully, you're going to have to think competitively. Regardless of the product or business you choose, it's fairly likely that you're going to run into stiff competition from a crowded marketplace, so you'll need to maintain a competitive attitude throughout the process of writing your business plan. Spend some time carefully observing and thinking, identifying similarities with your competitors as well as things you'll be doing differently. Realistically evaluate yourself and your own operation – your areas of strength and those in which you'll need to improve. It's a well-known fact that competing against established products or companies can be quite difficult, so it may be wiser to attempt to be dissimilar in some eye-catching way, thus minimizing the more direct competition. Look for a unique marketing strategy or a particular market niche in which to specialize. Develop creative ways to position your product or service in the market differently. Do all you can to identify an opening, find that unused angle, and then exploit it. You can do it!

blog comments powered by Disqus