Too many would-be entrepreneurs rush into launching their enterprises without preparing properly. A carefully researched and well-thought-out business plan allows you to determine whether or not your business concept will actually succeed and make money. For example, a builder who expects to sell homes needs to know information about the target market, competition, pricing strategy, and financing options.
A sound financial plan may help you test the validity of your business model, research the market, identify your rivals, and avoid possible risks. It may also serve as a guide for your company's growth. A business plan is a must-have to show that you've completely investigated your company's financial feasibility when applying for financing or soliciting investors.
In short, a good business plan helps you determine where your company is headed and how best to get there. Consulting your Family Business Lawyer to develop a plan can help minimize the risks and maximize your chances for success. It also ensures that your company operates within the confines of applicable regulations.
Here are the seven essential tips for creating a winning business plan:
1. Be Clear About Company's Goals And Vision
Making money is important, but it isn't the only factor to consider. You also need to understand why your company exists (its purpose) and what you want to achieve (its vision) with your brand and identify how you will generate revenue.
A company's vision is at the heart of its culture and should be articulated in a clear, concise way. Your Family Business Lawyer can help you create an effective vision statement that reflects your company's values and how it will attract new customers and employees.
Your company's purpose should be equally clear and concise. This can include the specific services or products your company offers, why they are unique or valuable, how you plan to make money from them, and what the end goal is.
Once you have a clear understanding of your company's goals and vision, it is much easier to develop a strategy for reaching them.
2. Know Your Competitors
Before you can develop a strategy for reaching your company's goals, you need to understand your industry and the competition. You cannot plan effectively if you don't know what is happening around you.
Competitive analysis can help identify how your business compares to its peers in terms of service or product offerings, financial stability, customer base, etc. This information will allow you to determine where gaps exist and how best to fill them with innovation or marketing initiatives.
Remember that your rivals might not be another company X, but rather a completely new technology that redefines your existing company obsolete.
3. Outline Your Business Model
Your business model is the blueprint for how you plan to make money. It should be clear, concise, and easy to understand. This will help you identify potential sources of revenue (sales, subscriptions, memberships, advertising revenues, etc.), calculate your costs associated with each type of revenue generation, and develop a strategic plan for expanding into new markets or increasing sales in existing ones.
Even if you don't intend to seek startup funding, indicating your business model is important. In fact, you'll be able to assess if your firm is worth launching or if you should rethink your idea by developing financial projections, which include a forecast of start-up costs, a break-even study, a profit-and-loss prediction, and a cash flow projection.
4. Create Realistic Goals
All of your financial estimates and projections should be conservative. It's a common rookie mistake for new business owners to be too optimistic about projected sales and income. Going with half the amount you believe is realistic with your first estimate is one safe route to take.
Setting stretch goals that are a bit more ambitious will help you achieve long-term success. While it's important to set realistic financial targets, don't forget your ultimate goal: increasing profits and reaching profitability as soon as possible.
It always feels good to reach a challenging goal, and as your business grows, you'll be able to achieve even more. Just remember not to overextend yourself – if something isn't working well in your business, don't try fixing it just for the sake of making progress. It's important to learn what needs improvement before you decide anything needs changing.
5. Back Up Your Claims With Solid Evidence
Every claim you make in your business plan should be supported by evidence. Your financial projections may be backed up by, for example, budget data, anticipated sales figures, and profit-loss reports. Website traffic data can support your digital marketing strategies.
Don't just rely on what you think is right; use objective data to back up your assertions. It will go a long way in helping investors, and potential customers trust your business.
6. Follow Time-Based Goals For Your Business
Set clear objectives for your firm, as well as trackable action targets, so that you can measure your progress. When you start to grow your company, defined goals help you concentrate and keep track of your progress. When you have a clear idea of what you want to achieve, it's easier to stay on track. And remember – progress is always good! Moving forward and reaching your business goals is a vital part of success.
As you move forward, things will inevitably change. Instead of letting those changes derail your progress, have a plan for how to adapt and move forward – with care and caution.
7. Hire Industry Professionals From Outside
You likely aren't as skilled at some of the more nitty-gritty aspects of your operation, such as crunching numbers, negotiating contracts, dealing with insurance, and preparing your taxes. Outside professionals, such as your Family Business Lawyer™, should provide you with guidance and support in this area.
Taking the time to find an outside professional to help you with specific tasks can make a big difference in your success. Not only will you avoid potential pitfalls and save time, but your business will also be run more efficiently – which is always good news!
We can assist you in avoiding overlooking critical parts of your operation that may detrimentally influence your chance for success, particularly those associated with the legal, insurance, financial, and tax (LIFT) components of your company.
Don’t Neglect Your Foundation
Your business is only as strong as its foundation. Make sure you have a solid plan for long-term growth and success so that your business can weather any unexpected bumps in the road.
Building a successful company starts with creating a sound foundation – one that is well-prepared for future growth and expansion. A solid strategy allows you to anticipate challenges, make wise decisions about expanding or changing your operations and build an organization that will be resilient during tough times.
We can ensure that you have the basic legal, insurance, tax, and financial (LIFT) systems in place so you can spend your attention and efforts on building your new company as your Family Business Lawyer™. Schedule a LIFT Start-Up Session with us before launching your new business, and then meet with us again to put the entire set of solutions provided in our LIFT Foundation System and Toolkit when your company expands. Contact us right now to get started.
We provide a full range of legal services for corporations and can assist you in making the finest decisions regarding how to manage your company throughout life and at death. For an ongoing business, we offer a LIFT Start-Up Session™ or a LIFT Audit, which includes a review of all the legal, financial, and tax systems you need for your company. To set up an appointment, call us today.
We can assist you in making the best decisions about how to manage your company throughout life and in the event of your death, and we provide a full range of legal services for business owners. A Review of All the Legal, Insurance, Financial, and Tax Systems You Need for Your Business is also available as part of a LIFT Your Life And Business Planning Session. Today is your day to schedule an appointment with us.
This article is a service of a Family Business Lawyer™. We offer a complete spectrum of legal services for businesses and can help you make the wisest choices on how to deal with your business throughout life and in the event of your death. We also offer a LIFT Start-Up Session™ or a LIFT Audit for an ongoing business, which includes a review of all the legal, financial, and tax systems you need for your business. Call us today to schedule.