Starting a business can be a very daunting adventure if a proper plan is not put in place. Most entrepreneurs start up their businesses without putting adequate plans in place to succeed. No wonder one out of every five businesses crumbles within 5 years! If one thing should be taken very seriously, it should be your business plan. This is your “blueprint for success.”
Every business begins from a thought. A thought or idea can only become reality when expected actions are taken. When an idea is conceived, the logical corollary is that such ideas need to be written out, in black and white and on paper; or else the idea will fade off when the enthusiasm that the thought initially brought subsides. Hence, having a written business plan is pertinent if your business is to stand the test of time.
Now, what is a Business Plan?
One definition, according to entrepreneur.com, is that a business plan is a “written description of the future of your business; a document that indicates what you intend to do and how you intend to do it.” If you notice a paragraph on the back of an envelope describing your business strategy, you have already started a written plan, or at least the first draft of a plan. The business plan itself consists of a narrative and several financial worksheets.
The very act of planning helps you to think things through in a systematic and thorough way. Study and research your market niche if you are not sure of the facts, and look at your ideas critically. It may take some time now, but helps to avert costly and disastrous mistakes in future.
In this article, I want to provide a very brief look at the steps involved in planning a business:
1. Identify Your Passion: Knowing what you love doing, even without making money, is the stepping stone in starting any business. Most people enter into a business they know nothing about, and stop after only few months. Some get tired of their businesses simply because they are not happy with the activities involved in running the business anymore. According to Sabrina Parsons, (CEO of Palo Alto Software) “Know yourself, and work in a job that caters to your strengths. This knowledge will make you happier.”
The reason why many businesses fail in their first five years is because the entrepreneurs do not find fulfillment in running their business anymore. Hence, they tend to move on in search for happiness.
You must look within by evaluating yourself and identify what you are good with. If what you are good at gives you happiness, think of how you can monetize it and make it a business. You do this by sharing your passion with others. However, passion alone is not enough in starting a business. You need to plan, set goals and above all, know yourself.
2. Conduct Intense Market Research: As stated above, passion alone is not enough in determining the type of business endeavor you should get involved in. You need to be sure if there are people who are really interested in paying for what you have to offer. Apart from that, you need to identity the category of people who can afford the prices of your products or services, and in what quantity.
You also need to determine how to attract your prospective customers. How do you intend to reach your targeted customers? How do you intend to distribute your products to your targeted customers? How do you know the actual price that potential customers are willing to pay for your products? These and many other things are what you should know before investing your money in starting any business.