Give me six hours to chop down a tree and I will spend the first four sharpening the axe.
You’re eager to get your business started— you have passion, an idea and some capital. But hold on. Do you have a business plan? If you don’t, listen up.
Writing a plan will take time but it gives you clarity on what you want to do, who to target, how to do it and when to expect to make a profit. Benjamin Franklin said it best, “If you fail to plan, you are planning to fail.” Starting a business is challenging enough so why not invest the time to establish a solid foundation for success.
A business plan forces you to:
- understand your customers. And by the way, not everyone will be your customer. Be very strategic and figure out the customer profile (gender, age, personality traits, behaviours). By clearly identifying your target market you’ll be able to know how to serve your customers best.
- research the industry. You might have a good grasp of the industry based on your experience. But if you’re taking a huge leap into unfamiliar waters make sure you know the key associations, incubators, trends and issues.
- know your competitors. In order to succeed you need to either do something better, faster or cheaper than your competitors. Put yourself in your customer’s shoes, why would they choose your company over the competitors?
- refine your business idea. Take a hard look in the mirror to determine if your idea is feasible and if you can make money. Test your idea, talk to your potential customers, gather their feedback and readjust.
- keep focused. The plan is a blueprint to your business. It will clearly communicate what the business stands for and guide the decision making process. When you’re faced with a difficult decision go back to your plan to determine if it’s in alignment with the overall strategy, objectives and value proposition.
So now you’re ready to write one—there are two common types of plans to consider:
- If you’re planning to get a loan from a bank—a formal business plan is a must. Banks expect thorough business plans and are looking for specific information to be provided. Here’s a great article from Entrepreneurs.com titled, 4 Essential considerations of a bank-friendly business plan.
- I recently attended a Business Plan Boot Camp workshop hosted by Enterprise Toronto where they taught a plan called a Business Model Canvas. It includes most of the elements of a typical plan but it fits on one page. Here’s a sample:
To get started on this type of plan, visit Canvanizer.com to download a Word or Google Doc template.
If you require additional support or would like some feedback on your plan, visit Enterprise Toronto’s three locations. Their advisers will go through your plan, give feedback and provide additional training or resources.
The will to succeed is important, but what’s more important is the will to prepare.