Let’s say you’re ready to strike out on your own and start a small business. Before you do, you need to create a detailed business plan. Think of your business plan as something that answers the questions every cub reporter learns to ask: Who? What? When? Where? Why. If you can answer all of these questions about every aspect of your business, you’ve got it made.
Consider some advice:
Don’t inflate your idea. It’s better to under promise and over deliver, even to yourself. In other words, a grandiose business plan won’t do you much good if you’ll only fall short of projected targets. So while it’s commendable to set challenging goals, be sure you have the numbers to back them up.
Don’t underestimate your start-up costs. Launching a small business pretty much always costs more than you think it will. Realize it might be a handful of years before you begin to draw a fair salary. That’s why it’s important to maintain a cushion, for business and personal expenses.
Don’t overestimate how quickly you can grow the business. You might be an overnight success – but don’t count on it. Even if you’re confident that you can build revenue quickly create a worst-case scenario and plan accordingly. Always calculate your downside.
Don’t underestimate the competition. Your business plan must frankly analyze the competitive landscape. Don’t lull yourself into believing the product or service you’re offering is unique.
Be specific and thorough. Too many business plans are bursting with vague descriptions. Without solid, defensible information, yours will have no value at all.