Free daily advice for people in small business
from someone who has been there, done that.
I firmly believe in business planning. The planning process forces you to think through the ideas you have.
Planning is a straightforward exercise in principle, but it can be extremely difficult to do.
With business plans, the aim is to match your business to the market. This forces you to look at the market, define it as best you can, and see if your business ideas measure up.
Questions: Is there truly a market for my goods/services? How big is this market? What part or parts of the market can I serve? What's the future of the market segment I plan to address? Is there a technological component/impact?
More questions: Is this market mature? Is it moving to the Internet? What's the competition? Shall I establish a bricks-and-mortar operation with an Internet presence? Or is it better to be totally Internet based?
These questions--and more--get at the foundations of a business. The answers must be reduced to numbers. The hard, cold numbers you derive from the marketplace will tell you whether you can succeed or fail. Planning can save you from dead-ends and failure.
Projecting numbers of future sales and costs is an iffy undertaking. The marketplace is dynamic. It can change directions very quickly. Business owners must account for this as best they can, continually adjusting.
I've found it useful to have a planning box. It rests on a shelf among the books. Anytime an idea occurred to me or a scrap of useful information crossed by path, I'd write it down and drop it in my planning box. About every 2 to 3 months, I take my planning box down and sift through the whole mess.
At this point most of the miscellaneous notes got discarded. But there were always gems to be found. These became a part of my road map to the future. I would flesh out ideas with some numbers, I would round out some projections, and then I would decide whether or not it would be worthwhile to change the business direction.
Get yourself a planning box. It can make planning an on-going and almost daily process. Then you'll have a solid basis to write that formal plan the lender requires for a loan. And you can head off into that expansion, confident that you've covered all the bases.
Questions? Email me direct at AlWarr16@gmail.com and put BLOG in the subject line.
I am retired and I'm not selling anything. Your privacy is always respected.