A business plan is so important in these days when raising finance because banks are more cautious than ever. This articles will help you understand what you need to put in a business to achieve your goal of having a small business.
Copyright (c) 2009 Kaye Dennan
Writing a business plan is essential if you want to borrow money? It really isn't that difficult to find the information, but it can be time consuming especially when you are keen to get your business up and running.
It is better to know what you are facing right at the beginning when you are starting a small business. It will help you stay focused, know your good points and your not so good points, and allow you to address issues that need improving before you actually start operating.
WHAT IS YOUR PROPOSED BUSINESS ALL ABOUT?
Now is when you need to thinking about why you are starting your small business.
Is it because you have always had a mad desire to run your own business, because you have a burning need to prove to everyone how good you are at selling, fed up with being bossed around by a so-called manager who knows less than you do, or do you really want to seriously commit your whole being to running a successful business?
That is what you need to be thinking about at this stage?
HOW WELL DO YOU UNDERSTAND YOUR PROPOSED SMALL BUSINESS?
For example, if you want to have a cafe, do you understand all the health and food regulations that will apply to what you are setting up?
Do you realise that there will be strict council regulations to abide by? What is your view of the menu you want to have - is it just what you prefer to eat and are there thousands of customers out there who will want to eat the same thing?
If you prefer to drink strong coffee, do you believe that all your customers should have the same served to them?
Many questins need to be answered before you start your small business.
HAVE YOU HAD A SERIOUS CHAT WITH YOUR ACCOUNTANT?
Before you set too many wheels in motion you need to have a chat to your accountant and see if you will have the funds for starting a new business.
I know of one lady who got so excited about buying her dream cafe. I, as a business broker representing the seller, asked her if she had the finance. Her answer was, "Yes, my husband just borrowed against the house to buy a semi-trailer so I should be able to get a loan." Alarm bells rang with me straight away because I knew where they lived and I thought 'semi trailers are not cheap so there is probably not enough equity left in the house to borrow more money' and that was exactly the situation.
Before being too committed in setting up your business you need to know:
- If you have the funds available
- If it is going to earn enough for your needs
- If you do not have funds available are you going to be able to borrow any
- What entity you will use to buy the business
By addressing these questions at the beginning you won't get into trouble early in the piece. Financing a business is a big issue and needs to be very carefully thought out.
A business plan will help you analyse many areas of a new small business and you will be able to solve many of these situations before they arise and affect your new business.
By doing a business plan for your small business before you start spending money you will be well on the road to success. Your planning will be so much clearer and you will have more understanding of your stock, staff, markeing and finance. Many skills make up the success of a small business and having a business plan at the outset will help you start on the right footing.
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