Five Steps to Business Plan Success
Every year, hundreds of startups are founded but only a select few will make it past the first year. Furthermore, statistics indicate that most startups will close within 24 months of starting up due to poor cash flow, financial instability, and difficulty finding investors. You can improve your chances and enjoy a healthy start to your business by strategizing these five steps in your business plan:
- Don’t Overextend Yourself Financially. It is natural to want to put all you have into your business to ensure its success but your best plan of action is to start off small and build your business responsibly. Limit your services or product line until your business is generating some income and sustaining itself. By adding to your service or product line prematurely, you are jeopardizing any financial gain you’ve managed to make and run the real risk of accumulating more debt than your new business can manage.
- Know Thy Competition. Get to know your competition, what they stand for, what they offer and figure out what you can do differently to attract your customers. Always remember, competition in any marketplace promotes excellence amongst the players. Be assured when the competition sees a new kid on the block, they will act accordingly to secure their spot in the marketplace.
- Know Thy Customer. Every business should be aimed at a specific target market, if you haven’t determined who your target market is then go back to square one and rethink your business plan. To establish your target market, determine who would be most likely to utilize your product or services. Age? Gender? Level of education? Income? Martial and family status? All these factors are important when determining what products or services you are offering to selected consumers at a certain price.
- Don’t Do it Yourself. Nothing spells disaster more than the one man/woman show! It is impossible to perform every task that your business entails by yourself. Consider outsourcing some of your work to individuals who are more qualified to do the work such as a writer (for your sales promotional literature), website designer, typist, or bookkeeper. These professionals will save you time and money in the long run so don’t try and muddle through certain tasks if your specific talents are limited to certain areas.
- Budget for Exposure. A common mistake for many small business owners is failure to establish an advertising budget. If you haven’t budgeted monies to advertise your business, you can expect your sales to reflect this omission. How can you attract customers if no one is aware your business exists? Your advertising plan doesn’t have to elaborate but it should be focused and persistent. Start off small by placing advertisements in your local newspaper or trade publication, or send out introductory letters to prospective customers. Consider enrolling in your local board of trade or getting involved in your community by sponsoring community sports teams and events. Be generous with your business card, they are cheap to print and are an effective means of advertising.
With a bit of luck, determination and advance planning, you can be assured that you have given your business a good start to build on and move ahead.