As we all know by now, the success rate for small businesses in North America doesn’t exactly offer a strong argument in the favor of the entrepreneurial spirit. It’s tough going because the marketplace is tough. It’s hard because in order to really succeed in today’s world it seems like you have to plaster your company’s logo on as many websites, bus panels, bumper stickers, T-shirts, and even tattoos as possible in order to get the message across that you even exist. However, it can be done. It just can’t be done without solid planning and the perseverance required to stick to a good plan and follow through with it. The first and foremost step if you have no experience in the business world and are looking for a way to get your small business off the ground, is to come up with the best possible business plan that you can write up. It is only with a good business plan that you can hope to attract the eyes (and money) of potential investors, who are always extra-wary about what they throw their money at and why.
The main thing that is going to attract an investor – and, in turn, cement the rationale for your business’s existence – is coming up with a reason why your company simply must exist. Call it your existential philosophy if you like. If you don’t have a concept that describes just what your business is going to do and just why it will fit perfectly into the industry you’ve chosen, then chances are you haven’t flushed out a very good business plan. The chances are even greater that you yourself have not figured out the particulars of your business venture, and as such, are in no position to offer a business plan to an investor in hopes of receiving financial backing. Robbie Burns spoke the truth when he said that “the best laid plans of mice and men often go awry” (loose Gaelic to English translation), but without laying out the best of plans, a small business owner can virtually count
on everything going disastrously off course.
Depending on what your business is going to be, there are all sorts of important, helpful things that you can put into a business plan. If, for instance, you are planning on starting up your own landscaping business, it would be prudent to incorporate the amount of mechanical equipment you’ll need in order to get started. You’ll want to mention how many employees you are going to hire for you venture – full time and part time – as well as forecasts on how much money you’ll be making in the business every month so that you can provide meaningful estimates on whether or not you can afford X number of full time workers. You’ll want to take into consideration any possible “down time” where you might experience a drop off in profits – for a landscape business, say, the winter months, where shoveling snow might be the only gig you get for two months – and how you are going to arrange layoffs of employees with respect to these estimates. Then you’ll want to figure out what your monthly expenses are likely to be – for instance, how much will you be spending on gasoline for your machines, and what happens if the price of gasoline suddenly goes up? – as well as what write-offs you are going to take advantage of when it comes time to do the company’s taxes at the end of the year.
Assessing risks, as well, is a key component of a good business plan. If you are opening a coffee shop, you’ll want to factor in the possibility that your espresso machine could one day have a nervous breakdown and completely stop the business from functioning normally, and just how disastrous this is going to be to your “best laid plans.” The human resources part of your business plan should cover some of the possible risks as well. For instance, if you want to start your landscaping business, what kind of compensation are you going to guarantee to your workers should one of them get injured? Are they going to be covered by worker’s compensation? How many employees do you think you will need to function properly and what happens if one of them falls ill and cannot work for an extended period of time? Is there enough local labor to fill these positions? In other words, you’ll want to address all the possible “bad scenarios” that could afflict your business and then come up with genuine solutions to these problems so that potential investors will not only say “Wow this guy’s got all his bases covered,” but also “Wow”, this business has a really good chance of succeeding.
Extremely integral to a good business plan is a solid marketing component. Here you’ll want to forecast for potential investors the many ways in which you believe you have a good chance of succeeding as a business in the marketplace. If you’re opening a coffee shop, you’ll want to explain just how you are going to handle the challenge of competing against larger chains, and just why the location you’ve chosen to set up your store is going to be ideal to attract a regular flow of customers. For example, when you are asked why you are opening a coffee shop in front of an old folks home, come up with the answer that you’ll have a steady base of regulars. If you are wondering how you are going to market and advertise your company, explain in your business plan just why you think printing the name of your company on the paper sleeve that insulates the coffee cups will be a good solution. Better yet, explain why the name of your company and its logo are eye-catching and memorable. In short, you want to impress people but you want to do so with as many statistical predictions and facts backing you up as possible.
Writing a great business plan won’t ensure that you get an investor to help you get started, nor will you be sure to succeed just because your plans are solid. But without one, you’re sunk even before you’ve sailed.