Many people dream of owning their own business. However, the percentage of people whose small business survives is small. This is due to poor planning for your business in the first place. Some things to consider when going for the goal of being an entrepreneur are as follows:
- Spend at least 6 months or more planning your business before you actually get it started. This step is perhaps the most crucial element to develop during the planning stage because it tells a complete story about your business. A well-prepared and comprehensive business plan (updated every six months) serves many purposes. For one, it makes you take an objective, critical and unemotional look at your business project and helps assist you in setting goals as well as how workable and desirable your business venture is. Additionally, it's an important sales tool for raising capital to outside investors. Investors are interested in the future potential value of a business. They need to be confident in knowing that they can earn a return on their investment in a reasonable period of time. A business plan also serves as a tool for applying for a loan. Your business plan will reveal your evaluation of your venture's ability to prosper and reflect your management abilities as well. Finally, you will need this business plan in the event that you are audited by the IRS. They will want to know if your business is a legitimate business and having a business plan proves your case.
- Business plans can vary depending on the type and size of the business. However, all plans should be organized into different sections. The Small Business Association is a great resource to help you in setting up your own business plan. If you are not comfortable with doing it on your own, you can hire a lawyer who is specialized in business law who can set it up for you.
- After preparing your plan, you should be able to understand lending and investments so that in the event your business plan needs work, you can revise it before you submit it to lenders.
As I've stressed in this article, the importance of a business plan is not just the document itself, but also the process and thinking involved in developing it. Furthermore, although it may take more time and energy to get a business plan together, the time is well spent if the business grows and prospers.