10 questions your business plan should answer
October 13, It lets you use your voice to send messages, dial calls, schedule meetings and set reminders. Apple stresses that "Siri understands what you say, knows what you mean, and even talks back. These are all good questions, but what would really be helpful is if Siri could answer the questions that are essential to running a successful business.
10 Essential Questions to Answer Before Starting Your Business – Article #4
Research of successful entrepreneurs has documented that successful small business people have certain common characteristics.
This checklist cannot predict success, but it can give you an idea of whether you will have a head start or a handicap with which to work. Seek extra training and support, and enlist the help from a skilled team of business advisors such as accountants, bankers, attorneys and SCORE counselors. Small business owners have many things in common. Below are some of the qualities you will need to be successful.
Compare your skills and expertise with others who are successful in similar businesses. Can you duplicate and surpass the capability of other successful businesses? Review business journals, trade magazines and other comparative studies that identify the requirements to operate the business. From that information, derive a formula for the skills and traits you plan to incorporate into the business operation.
The business plan is a written guide that details the startup and the future direction of your company. Who should write the plan? You, the entrepreneur. No one else knows your business idea and goals better. Yes, there are services that can do the work for you, however, you are the one who must present this business idea to bankers or other investors.
Therefore, it is best if you are very familiar and comfortable with the plan. The fact that a bank or lending institution requires a well-executed business plan is a secondary consideration. The primary purpose of the business plan is to guide the owner or manager in successfully operating the business. Preparing the plan forces the writer to consider all aspects of the business and to confront any problems the plan highlights. For example, a monthly compilation of all known costs, over time, will indicate the revenue necessary to support these costs, plus a profit.
This leads to the question of whether or not this revenue number is reasonable. If not, it may cast doubt on the viability of the venture itself. The business plan is a vital management tool that enables the manager to anticipate situations before they become problems — or worse yet, emergencies. It is wise to find out what startup costs you will incur before starting the business. There are many web sites and other resources including SCORE offices and Business Information Centers that provide guidelines and worksheets to help determine costs for your business.
Each item on your proposed budget sheet should be researched. Closely estimated costs can be obtained from utility companies, trade associations, and networking with other business people who may have already gone through this experience.
Do not start buying until the investigation shows this venture is viable and you have all the information needed. You should have a basic understanding of each of these statements. When compared with statements from prior periods, you can determine whether something is happening in your business that needs your special attention. Your accountant can prepare these statements for you from the business data that you supply.
There are also a number of computer software programs that will help you generate these statements from your input of regular transactions—such as sales, collections, purchases, payments and payroll. A SCORE counselor can help you understand these statements and may be able to direct you to a workshop on this subject.
In addition, most community and business colleges teach courses in financial statement analysis. Your businesses cash-flow cycle may differ substantially from the income statement projections.
Even if the projected income statement shows a profit, it is possible that the cash flow for the same period is actually negative. The analysis of monthly cash flow can indicate whether your business will collect sufficient cash to pay operating expenses. It will point out specific months during the year when the business may experience operating cash shortfalls and, therefore, either require additional capital or excess cash reserves for payment of expenses. It will also show when you may be able to make debt reductions and when there is excess cash to make major purchases or expand operations.
By developing a monthly cash flow projection, you can time cash needs and quantify the amount needed. The cash flow projection is an important management tool and must be developed with very realistic expectations. Sufficient cash is critical for a business to pay its expenses and to enable it to expand. If your monthly cash flow projections indicate frequent cash shortfalls, you should review the type of products and services that you offer, the mix of sales, the pricing and terms of the sale, and your short-term borrowing needs.
Develop a positive business relationship with your bank. You may find that every time you go to your bank you speak to a different loan officer, so you should know them all. When the loan officer gets a promotion, you must start all over again with another person. If you want the bank to take an interest in your business, then you have to take an interest in theirs.
A good location can make the difference between a profitable and a bankrupt business. There are many questions to consider when choosing a business site. Use the questions below as a checklist for potential locations and then compare several sites.
No business operates without direct competition. Direct and non-direct competitors try to convince customers to buy their products or services instead of yours. It is in your best interest to learn more about the companies that are trying to reduce your take-home pay. List the strengths and weaknesses of each competitor. Talk with friends, visit your competition, call for information about their products and analyze how they advertise.
Next, take a sheet of paper and list the major competitors. Give each a rating, on a scale of one to 10, for product quality, process, advertising, price and customer satisfaction.
You can add other ratings that you feel are important. Your business can become more profitable by adopting practices you admire in competitor operations and by avoiding their mistakes.
Some of your competitors have been in business successfully for many years. Certainly, as a new or relatively new business, you can learn a lot from them. To market your business, you must define your customer.
To maintain consistent sales growth, you must become knowledgeable about your market. Research will provide answers that are not available from your business records and a financial analysis. Conduct research through trade associations, your local chamber of commerce, libraries or even ask for the help of a SCORE counselor. Pay attention to how competitors market to their customers. Perhaps, some of their marketing strategies can be adopted for your business, or you may find examples of what not to do.
The marketing strategy should summarize your findings about the key target buyer description, market segments the company will compete in, the unique positioning of the company and its products compared to the competition, the reasons why it is unique or compelling to buyers, etc. A marketing brochure can be long-lasting or short-term. It can represent your business to potential customers and it can be a referral piece for existing customers. Decide the purpose of and goals for the marketing brochure before you begin to design and write.
Remember, this brochure represents you and your business, so be sure its look and feel complements your business. It is wise to have your brochure professionally designed. Even if you have computer graphic skills, design is best left to professionals. Develop a strategy that puts the customer first. Customers will receive the best possible service when employees are empowered to make this happen.
This is not to say that you should be lenient with your policies, but have a degree of flexibility. Just remember, a lost customer could spread the word of their discontent, resulting in more lost customers. Review the most common reasons for poor customer service. Use these insights as a way to improve your customer service:.
SCORE is a nonprofit association consisting of 10, business counselors who donate their time and business expertise to guide small businesses via face-to-face mentoring or online counseling. Small Business Administration SBA , has assisted millions of start-up and growing businesses since Using email, your counselor will answer questions, give advice and otherwise provide valuable support—all for free.
Also on the SCORE site, you will find articles written by industry experts and successful small business owners. Questions to Ask When Buying a Business. Avoid These Three Startup Mistakes. What kind of person makes a successful entrepreneur?
How do you measure up? Ask yourself these questions: Can I persevere through tough times? Do I have a strong desire to be my own boss? Do the judgments I make in life regularly turn out well? Do I have an ability to conceptualize the whole of a business? Do I possess the high level of energy that is sustainable over long hours?
Do I have significant specialized business experience? Was this article helpful? Starting or Growing a Business? Check out these Offerings. Liked this article? Try these:. Back To Top.
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Therefore, I have listed 10 essential questions for you to answer before starting your business. When I think about starting a business, I often think about going on a vacation. I have to answer some questions like the following ones:.
By Steven D. Peterson, Peter E.
One of the first things budding home business owners are encouraged to do is write a business plan. They pull out a business plan book filled with details on SWOT analysis strengths, weaknesses, opportunities, and threats and financial reports, and quickly become overwhelmed. A business plan is basically a road map for success.
10 Questions Your Business Plan Should Answer
Writing a business plan can seem daunting if you've never done it before. However, it's something you can't afford to put off or ignore. Having a sound business plan is crucial to the survival and development of your business. Alan Gleeson explains how to get it right. The starting point for any business plan is audience.
10 Crucial Business Questions To Ask Yourself
There are a lot of would be entrepreneurs out there with a great idea, but are afflicted with Business Plan Paralysis. Instead of shipping product, they're "working" on their plan, doing more "research", or "thinking about it". I think the current literature on entrepreneurship overcomplicates things. Read the guides at Entrepreneur. And if these sources are to be believed, your business plan must also have serious sounding sections like Executive Summary, Competitive Analysis, and Financial Projections. Right now, all you need is an internal working plan to get you going. And to get that working plan, all you need to do is answer these four simple questions. Every company exists to create new value. That's what customers are paying for.
Whether it is insufficient market research, financial planning, management, lack of social media presence, website or something else, these mistakes all boil down to a lack of planning that can be traced back to the roots of your company: the business plan. Before we detail how to write a business plan, we should figure out what a business plan is.
Which is great, except too many people jump into entrepreneurship without any preparation. Starting a business takes a lot of preparation, and you have to do the work. So many entrepreneurs have great ideas, yet what they need is an actionable plan for getting to the next level. Answering these 11 questions will help your business start off on the right foot and give you a jumpstart on the business planning or Lean Planning process.
Create a Business Plan by Answering 4 Simple Questions
Research of successful entrepreneurs has documented that successful small business people have certain common characteristics. This checklist cannot predict success, but it can give you an idea of whether you will have a head start or a handicap with which to work. Seek extra training and support, and enlist the help from a skilled team of business advisors such as accountants, bankers, attorneys and SCORE counselors. Small business owners have many things in common. Below are some of the qualities you will need to be successful. Compare your skills and expertise with others who are successful in similar businesses. Can you duplicate and surpass the capability of other successful businesses? Review business journals, trade magazines and other comparative studies that identify the requirements to operate the business. From that information, derive a formula for the skills and traits you plan to incorporate into the business operation. The business plan is a written guide that details the startup and the future direction of your company. Who should write the plan? You, the entrepreneur.
6 Questions Every Business Plan Should Answer
Crafting the perfect business plan is often a challenge for any number of reasons. However, one of the biggest challenges standing in the way of a good business plan is the fact that oftentimes, no two investors, judges or members of your audience are looking for the same thing when evaluating a business plan. To help, here are six questions every business plan should answer. I always look for what will give the business a competitive advantage relative to businesses that want to offer the same or similar goods and services and an analysis of the competitive landscape. I pay particular attention as to whether there is valuable intellectual property, be it patents, trademarks, copyrights or trade secrets, that will serve as barriers to entry for competitors. The key to any successful business is to be a growing company in a growth market. My frequently asked question is, "how do you plan to feed and clothe yourself and where do you plan to sleep while you're getting this venture off the ground? In every business plan, I like to see the recognition of the need to cover and staff the production, sales and finance parts of the business. Roles should be established for the entity as if it were mature and successful.
