Before embarking on opening a new business, several things must be taken into consideration. Research and analysis must be done, and a business plan must be prepared. A business plan is required if you are obtaining financing because the lender wants to know exactly what it will be investing in, and that it will get its money back. Lenders are taking a risk too so they want to be assured that your business has at least a 90% chance of being successful. A well written business plan will outline every aspect of the business and give the lender a clear picture to aid in them in their financing decision. It will also help you to set realistic goals and objectives, and set yourself up for success.
Your business plan should include:
* The company mission statement
* A description of the business and the products or services that will be offered
* The demand for your product or service, and any additional products or services that your company will be offering.
* What hours the business will be open.
* A description of the market and demographics, including the market for your product or service. Outline your target market in detail, and if that market is weak or strong. Is the market saturated, or is there room for more of the product or service?
* A description of the location, and If the company will have an online counterpart of the business and if customers be able to order products or services online.
* What kind of business organization your company will be-sole proprietor, corporation, non-profit, Limited Liability Company (LLC), S-Corporation or Limited Liability Partnership (LLP). There are many others to choose from depending on what state you plan to do business in.
* The proposed physical location of the business.
* A description of the competition, and what your sustainable competitive advantage will be. If you want to open a bookstore, what product or service will you be offering to your customers that other bookstores in your area cannot offer?
* How you will differentiate your product or service from other similar products and services in your area.
* A description of the management of the company.
* A description of other company personnel.
* An organizational structure such as an organization chart.
* A detailed SWOT analysis. SWOT stands for strengths, weaknesses, opportunities and threats. Strengths and weaknesses are internal. Opportunities and threats are external.
* Application and expected effect of loan or investment.
* How your company will build and maintain vendor relationships.
* How the company will conduct supply chain management, detailing how the chain of suppliers of your merchandise be managed.
* What the pricing strategy of your company will be.
* What kind of customer relationship management your company will have and how you will develop customer loyalty.
* A summary of your visions and plans of what direction you want your business to take.
Detailed financial plans that include:
* A financial projection that shows net sales, net profit, net profit margin, asset turnover, return on assets, cost of goods sold, variable and fixed expenses, inventory, accounts receivable, current assets, fixed assets, total assets, other current assets and gross margin.
* A one-year cash flow projection.
* A three-year financial projection that outlines income and expenses.
You will need to plan and show how your business will survive during slow times, and how it will pay its bills during rough periods. A contingency plan is a smart plan, and can save you a lot of grief if something happens to your business such as fire or flood. Most business owners can't afford to lose business because of an unexpected catastrophe, so planning ahead is crucial to the health of your company.
After your business is open, you will need to build and maintain a customer base. Everyone is your customer, from delivery people to mail carriers. Make your product or service the best, recruit these customers, maintain your customer loyalty, and your business will flourish. In addition to your sustainable competitive edge, offer something that no one else in your area offers.
Starting a business is a lot of hard work. The overall success of your company depends on the groundwork that you lay in the beginning. Your hard work will pay off when customers patronize your business, your books show a profit, and your open sign stays on.
Patti McMann is a freelance writer. She writes on a variety of topics for print and electronic publications. She has a diverse background in many subjects, and majored in business management, marketing, and information technology. Her eBook "Diabetes: A Beginner's Guide to the Basics" is for sale at http://www.pattimcmann.com
