Creating a successful business plan is no easy feat. It takes time, effort, and careful consideration to ensure that your business has the best chance of succeeding in today’s competitive market. Damon Becnel shares five steps on how to create an effective business plan for your new venture.
1) Define Your Business Goals
Defining your goals may seem like an obvious first step for many entrepreneurs but, it’s important not just because they help define who you are as a company — but also because these goals should dictate all other decisions moving forward: what products or services you offer; whether or not new technologies would benefit the product line; where potential locations might exist for expansion and more.
The most successful companies know where they want to be in the future and what it takes to get there.
What are your long-term and short-term goals? What do you want to accomplish with this business in a year, five years, ten years, or twenty years from now? Write them down. In addition, try to anticipate what the competition will be doing so that you have a better idea of how competitive your industry will be over time.
2) Analyze the Market
How exactly do you know if your venture will meet the needs of your intended customer? One of the most important steps in this process is understanding your market and how it has changed over time.
How large is the market you’re entering? What are its demographics? How does your product compare with similar products that already exist on the market, both theirs and yours?
If the market is large and thriving, keep in mind that there are only so many customers available for a new business venture. If it’s shrinking, consider what can be done about this trend before going forward with any major investments. What might its future look like? You want to know not just what exists today but also how things may change over time as well — because maybe tomorrow is when those changes start happening!
3) Create a Mission Statement
Mission statements serve two purposes: establishing who you are (i.e., this business will provide customer service with professionalism, courtesy, and respect). The other purpose may seem less tangible but can actually have an even bigger impact on your bottom line long-term: giving employees direction about working together more effectively toward shared goals.
Think back to when you were at school – everyone had a common goal (to learn) and working towards that goal was the most effective way to accomplish it.
A well-put together mission statement will help the company set and achieve their goals more easily by aligning everybody with a shared purpose: they know what is expected of them and how they are going to be measured for success throughout this process (i.e., “We hold our employees accountable for using values that guide their decisions, in every action”).
Mission statements can also serve as an outline or framework during times when you feel like your business has gotten off track; it helps remind people where everything started so that everyone understands why they’re doing what’s necessary now to get back on the right path again towards achieving those larger goals.
4) Develop An Organizational Chart
One of the most important things for any business to do is set up an organizational chart with clear reporting structures. This will ensure that there’s a way for employees and managers to know who they should go to when they need something done or have questions about their role in some part of the company, as well as what level of authority each person has within the organization.
A good organizational chart distinguishes different levels such as: top management – senior executives; middle management – supervisors; front-line workers. It also needs to be understood how reports are delivered from one employee/position to another so that everyone knows how information flows through this system.
This may seem like a tedious process but it actually frees up time because people can’t spend so much of their time asking around about who is supposed to be handling what.
5) Determine Start-Up Costs and Funds Required to Carry Out Your Plan
There are so many factors that go into the start-up costs of any new business venture, but you need to know these things in order for your plan to be realistic. For example: how much does it cost to lease or buy a building? What about equipment and furniture? How will other employees be compensated (i.e., paid)?
The funds required also depend on what kind of company this will be – whether it’s an entirely new product line instead of just adding another location within an existing company. The more complicated the product/service, the higher upfront investment there will usually be before seeing significant returns; conversely, if it doesn’t require nearly as much work up front, then those initial investments may not be as high.
Since it can take anywhere from 18-36 months before a start-up becomes profitable, you want to determine how much money will be required each month and also what the estimated return on those investments might look like if things go well. This way, there are no surprises down the line when costs or timeframes change – because they often do!
Damon Becnel agrees that this is a very general overview of creating a successful business plan for new ventures. Some other points to consider are: what the company does with profits and who owns and controls decisions.
Your strengths can also affect your success as an entrepreneur – so don’t forget about these factors when you’re developing this part of your project! If you find yourself sitting on the fence between two different career paths, it might be worth looking at those options again before making a final decision; even if one seems like it’s not going to work out, it’s good to have this information in front of you when making those types of decisions.