Starting a business is an exciting and life-changing endeavor. To be be your own boss, work your own hours, and do the work that you’ve always wanted to do is incredibly freeing. But before a business can be a genuine success, there is a great deal of planning, investing, and organizing that has to take place.
Writing a plan is at the top of the list of every successful business owner, and while the concept is simple, it’s easy to make mistakes – especially if it’s your first. Here are five tips for developing your first business plan.
Know Precisely What You Want to Do
A surprising number of business owners go into business without knowing down to a T what they want to do or sell. Before writing a plan, ask yourself some hard questions about what you are best at and whether that falls in accordance with what you want to do. Making a skills inventory can be an enormous help in this area, particularly if you rate your proficiency with each skill.
Know Why You Want to Do It
In the business world, the question “What is your why?” is heard often. Why do you want to start a business? Why do you want to start your particular type of business? These are philosophical questions, to be sure, but knowing why you want to run a business will help to maintain your day to day motivation, perk you up when things become difficult (which is an inevitability), and help inform your long-term goals, especially if and when you decide to expand your business.
Plan for Unexpected Costs
Your business plan will include lots of numbers; what a storefront or office may cost, the cost of supplies and services like internet and electricity, and what you’re charging for your services or goods. However, another number should go into your plan – money you budget for unexpected costs. You might have to pay for anything from a replacement shipment for a lost product to replacing parts in your storefront’s bathroom. Make sure you have a month-to-month budget planned for unexpected costs – even if it’s small, having that money set aside in the books will give you greater peace of mind.
If you have a great deal of money to invest in opening a business, all power to that – but if you’re starting out with a tighter belt, start as lean as you possibly can and make sure you go under the budget you’ve set. Once you’ve determined what you need to start and operate your business, price several different products and services to save as much money as you can. Look for business-owner specific deals or coupons. Take advantage of promotions and sales wherever possible.
The vast majority of business owners take most of their first year to turn a profit; anywhere you can save a few dollars is better for you and your company, and while having the full set-up is something to aspire to, doing business on as lean a setup as possible the first couple of years can make the difference between profit and failure.
Plan to Expand Your Skill Set
Owning and running a business requires a variety of skills from bookkeeping to marketing. If you don’t already know how to do those things, your plan should include time and funds, where necessary, to expand your skill set. Expanding your skill set doesn’t have to be expensive – resources from the small business section of your local library to digital commons resources like Skillshare and Coursera can help you learn the back-end skills of business ownership quickly and easily.
Whether you plan to open a spa or an accounting firm, these five tips will help you formulate an effective business plan – and ensure greater long-term success.