Entrepreneurs who set out to start a small business have a tough road ahead. From the time the idea of a small business crystallizes in their minds, they need to take difficult decisions and be convinced that they have the ability to set up the business, have the perseverance to last through the trying initial phase, can also take big risks, put all that they have at stake, and will not back out even if there are delays or losses.
Once this mind-set has been established, the next step is to write a small business plan. A business plan is a written statement about the economic viability of the business being started, with a detailed description about the business in mind and its prospects. It must list all the goals and how the entrepreneur plans to achieve them, and must also give details about the market for the product, forecasts, the team to be employed and a complete financial analysis.
A business plan is important for businesses of all sizes. Before it takes shape, the entrepreneur has to strategically plan how she is going to use her expertise to set up the business and avail the opportunities available. Strategic planning entails an analysis of the business environment and accordingly set targets and goals for the business. The entrepreneur needs to develop a plan in which she can specify how to maintain a steady cash flow and have concrete implementation details. Plans and a theoretical analysis that appear brilliant on paper may not be practical. Hence, it has to be a very carefully thought out and planned exercise.
A small business plan needs to be as informative as one prepared for large businesses. It must also focus on the same aspects and include the following:
- Description about the Company – The business plan must first explain the legal framework about the registration of the company and governmental clearances taken to set up the business. It can give insights into the start up plans and the time frame envisioned to get the company operational.
- Product or services to be provided-the company is either going to manufacture a product or provide a service. This must be explained along with the target clientele and market for it. Projections of expected demand and benefits to the customer are valuable inputs.
- Market Analysis – This is essential since the entrepreneur needs to know the market, the existing players in the field, customer expectations, gaps that can be filled by the product and so on.
- Implementation details – The strategic planning done by the entrepreneur can be used to formulate an implementation plan, which must contain step-by-step details and management responsibilities being assigned. A concrete time frame highlights the seriousness of the entrepreneur in getting the project started.
- Team of employees – Even small businesses will need a small number of people. The management team must be discussed in the plan since it will display how a qualified set of people are responsible for starting the business.
- Financial details – This is the most crucial part of the plan and must include the assumptions made, the funds available, the projected break-even point and the expected profits, business rations, cash flows, loans and grants.
- Executive Summary – finally a summary of the entire plan is necessary since it highlights the key features of the plan, the present and future scenario. This can also be placed in the beginning of the business plan.
A small business plan with all these details will be instrumental in getting loans and funds and determine its success at every step.