Defining Your Business: A Business Plan
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Question: Should I or shouldn't I write a business plan?
Answer: You must! Even if you are funding the purchase of a used engraving system from your piggy-bank savings, a little planning and self-analysis is valuable.
A business plan is an essential step in turning your ideas for a product or service into a successful venture. The need for planning is a key part of developing and managing your business. Don't underestimate its value to you during your early business days. A business plan helps you to appreciate what it will take to succeed and keeps you focused on a clearer path when the business encounters difficulty. In the area of planning, there are no shortcuts!
This guide is only a reference. There are plenty of good books and simple software programs available to guide you in developing a business plan. Just accept the fact that doing some planning is a healthy way of starting an engraving business, or for that matter, any business.
There is no single best way to begin. The guidelines are general and every business has its individual needs. You may be able to get by with simple notes while others may need a detailed analysis. Much depends on your need for outside support or financing. Most serious commercial lenders require you to provide some research to justify the loan. At a minimum, a plan should answer the following for you:
- What do I want and what am I capable of doing?
- What are the most workable ways of achieving my goals?
- What can I expect in the future?
Here are the basic steps for most business plans:
- Make a commitment to go into business for yourself.
- Choose your products or services. Analyze your strengths and weaknesses including your experience about the product or service you wish to sell.
- Research the local markets. Define the local needs and areas to exploit.
- Forecast your potential sales revenues. Be realistic. No pie in the sky approach. Try breaking down the first year by month, the second year by quarters, and the third year's sales annually. Take into consideration things like slow seasons for the products you may offer, and holidays and vacations you plan for yourself. Forecasting is making an assumption, but try to make realistic ones.
- Choose a location.
- Develop a marketing plan. How will you reach your potential customers: phone listing, newspaper, direct mail, Internet, or direct selling?
- Develop legal, accounting and insurance plans. You'll know when you need help. Don't let the costs of professional services put you off. Business insurance and legal or accounting advice can be important in the early stages of your business, especially if you are realizing significant growth.
- Develop a computer strategy. This will be discussed in greater detail later, given its importance in both running a computerized engraver and your business's accounting or management software.
- Write a cover letter. This is necessary if you need to approach a lender. A financial analysis and cover letter ties all the preceding steps together and summarizes your plans and needs.
As an essential step in getting your venture off the ground, the would-be entrepreneur must prepare a business plan. The plan enables you to anticipate opportunities, costs, difficulties, and requirements of deciding to go into business, establishing the business, and operating the business. The business plan forces you to think about what must be done and how to do it.