Gathering information prior to writing the business plan: the planning phase.
Business or hobby?
One question that begs for an honest answer is: “Is it a business you want to start or is it a hobby?” This is a vitally important question because these are two very different companies or entities. Starting and running a business requires a lot of extensive and deep analytical thinking, legal action must be taken, and a lot of planning and budgeting must be done. One cannot stress this enough.
business skills
Entrepreneurial skills are naturally inbred in very few people. Indians and Chinese seem to have it as a natural trait. Many people think that because they are starting a trading business, it should be successful because they are buying at a low cost and selling at a higher price. So, therefore, a profit must be shown and everything must be in order. Not true in many cases, many hidden costs are not taken into account. There are hidden costs, such as phone, gas/transportation, stall or rent, packaging, owner’s salary, etc.
Many times the businessman uses the money, which should be in reserve to buy more shares, for his personal use and then wonders how all the money or profit has “disappeared”. He would now have to somehow raise more money to buy his next batch of stock and/or raw materials. Such a business owner is actually getting poorer every day and is hardly aware of it.
If you only approach friends and family with a business idea, and none of them have the knowledge to advise you, the rot will begin to set in. Wrong or ill-informed advice is not what you need.
Developing a complete and accurate business plan is a very important step that anyone looking to start a new business or expand an existing business can take. The business plan covers all the important steps, decisions, reports, and forecasts necessary to assess the likelihood of success or failure in the new venture. At least one has a base from which to work. It can always be used as a reference throughout the life of the business and can be easily adjusted for future expansions or changes in the business process.
Business planning, mind mapping and information gathering.
If you only approach friends and family with a business idea, and none of them have the knowledge to advise you, the rot will begin to set in. Wrong or ill-informed advice is not what you need.
The act of planning helps you to think things through, study and research if you are unsure of the facts, and critically analyze your ideas. It takes time now, but avoids costly, perhaps disastrous, mistakes later.
Bankers and financiers assume you mean business when approached in this regard, and they expect honest and accurate information. There is no quick and easy way to deal with this; that his path Prayed no way.
We all have skills, talents, and learned skills. These can be used to operate a business, which will generate an income. However, extensive and deep analytical thinking and planning are very important because, without them, one is destined to fail.
Discuss your business plan with people who can give you advice; bankers, Trade and Industry department, Business Partners Inc., other institutions that give money for small business initiatives, a lawyer, an accountant, and several other people who have a great deal of experience in their specialty fields.
When planning to start a business, take the following steps:
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Talk to product specialists for advice on your products and/or services.
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Talk to bankers, a lawyer, an accountant, and various institutions that offer grants or loans for small business initiatives.
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The people listed above will give you a blank business plan form, among other forms, to fill out.
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The business plan is usually a great help in planning and budgeting for the business. And it is a good guide for everything there is to do and decide.
Meet with whoever your partners are, if any, and discuss the entire planned business process, including:
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The type of commercial property that best suits your business
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The products or services to offer
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The necessary place
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The necessary machinery and vehicles
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Start-up expenses need to be established and discussed
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Capital requirements and business leadership
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Deciding who will perform what functions in the running of the business.
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Your target market
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The environment of your area to cover
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The economy relative to that area, current demand, future growth, etc.
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Determine what barriers currently exist that may hinder your success
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Promotion of your products and/or services
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Distribution channels
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Operational plan for purchases, production, sales, etc. needs discussion
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Legal environment and requirements
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Inventory and suppliers
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Insurance and other professional advice requirements such as, lawyer, accountant.
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Establish a record keeping system.
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Banking services needed
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Personnel requirements and Human Resources policies
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Do the costing of each product with great precision.
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Calculate sales prices based on all costs plus markup
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Write the financial plan or projected budget for twelve months
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Prepare the projected cash flow for twelve months
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Write an initial balance sheet
This key information will then be used to write a meaningful business plan. And all the information is interrelated and synchronized. In closing, the pre-planning phase takes time and effort, but is a very necessary step to ensure success.