Do the groundwork that will improve your businessís chances of success. At every step along the way, seek advice from your support team.
Take these steps and you will be clear about what you are doing have the fundamental building blocks of a business plan and be able track your progress.
|What should you do?
||What's in it for you?
||Write a sentence describing what products or services your business provides.
||You have a short statement that tells people-investors, customers, family members-what you do. You'll use it all the time.
||Write down who your customers are and why they will buy from you over the competition.(Price, quality, innovation, service, convenience?)
||You get a mental picture of the ideal customer, including demographics, and the way the customer thinks. It's very helpful in your marketing and other decisions such as pricing, distribution and so on.
||Research your market before investing in resources. For example: products, customers, competition, traffic patterns, parking, rents, employee availability, labor costs.
||The more you know, the better. Try to get real numbers, not estimates, to use for your projections.
||Decide how you will get your product or service to your customers-how will they learn about your product or service. For example, directly to customers through retail, distrbution arrangements or over the internet.
||You can now put some costs to these items and make sure the methods you choose are linking up to the customers you have identified and their reason for buying from you. You will also begin to recognize any problems or bottlenecks in your strategies and develop solutions or alternate plans.
||Decide where you will conduct your business. Can you work at home or do you need an office, a plant or a store? Choose a location that balances all your important criteria such as budget, traffic and visibility.
||This will lead to concrete information about the cost of rent or real estate, labor and distribution. You may also be able to determine traffic patterns, customer parking availability and other important considerations.
||Forecast your finances: Create realistic income statements and cash flow projections. What will your costs, sales and profits be for the first two or three years? Will you have sufficient cash flow to survive the start-up? What is your break-even point (the point at which you begin to make money)? Talk to your accountant and banker.
|| These will prove to yourself and indicate to lenders and other backers that your ideas are based in reality. You must show that your plan has a definite timeline and will make money and pay back investors.
||How will you obtain raw materials or other crucial supplies? Are there backup sources to draw upon?
||With a list of suppliers and alternatives, you are prepared if one goes out of business or cannot meet your requirements.
||Decide how many employees (if any) you need, and find out whether it is easy to hire people with the required skills in your market area.
||You will know what skills you will be looking for and you will have a better understanding of what you will need to pay, including benefits, to attracts employees and fully staff your company.
||Set up your advisory team: Get professional advisors, partners and mentors behind you.
||You get the benefit of their experience with other companies that have gone through similar situations.
||What are the key risks your business will face? (Consider problems such as the failure of a key supplier or customer, product-performance issues, legal disputes and illnesses befalling key employees-including you.) What will you do to deal with these risks?
||You will be prepared for most foreseeable situations. You may wish to buy insurance for certain risks. Check with your RBC small business advisor or insurance representative.