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Why You Need A Business Plan For Your Startup

By David S. Chang

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Want to start a business? The first place you should start is by creating a business plan. A business plan is vital to help clarify your thoughts, your funding options, your market research, and your overall operations and strategy.

Without a plan, you are essentially heading into your entrepreneurship journey blind. This could lead to a clumsy launch, limited project management, overlooking important opportunities, and wasted resources.

When you launch your own startup, you will be stepping into the unknown and you want to be as prepared as possible. The military will spend significant time planning for operations. Even though from experience “no plan survives first contact”, going through the planning process itself is the most valuable aspect.

When you create a business plan, you want to be focused and plan on the right aspects of the business. Below are the most important components you want in your business plan.

Funding

The most critical aspect of your business plan will be your ability to plan and explore your funding options. You need to budget out how much investment or funding you will need, and where you will be allocating the funds received.

Given that most businesses fail due to lack of capital, it is smart to plan for overages and assuming that you will need more funding than you originally plan for.

If you head to the bank to apply for a loan, you must know your figures inside and out. They need to be accurate and based on realistic projections. Guessing or having a “figure it out as you go along” attitude will not convey confidence to potential sources of funding. If you need help figuring out how much you need, talk to vendors, research the competition, and get quotes.

An alternative to a business loan are angel investors. These industry experts can alone take your business to the next level. They will however scrutinize your financial forecasts, budget, and business plan. So it is important to make sure you are well prepared and have done your due diligence.

Marketing

An online marketing strategy is vital to ensure that your potential clientele know about your business. An important part of your marketing plan is your brand, logo, color scheme, and message.

With many marketing strategies to choose from, you want to focus on using the right one at the right time. With today’s technology, you can use apps like https://setapp.com/apps/xmind. XMind is a perfect mapping tool to clarify thoughts, help you brainstorm and keep your ideas structured. You need to ensure that you have a clear timeline for your online marketing strategy to ensure maximum effectiveness.

One of the most important marketing tools is social media. You can use companies like SproutSocial to help expose your brand and product or service. If you haven’t done already, make sure you have a Twitter, Facebook and Instagram account. A strong online presence is crucial to any new business.

Marketing also covers the SEO capability of your website. If you need help with search engine optimization, you can outsource this business function to off site experts. They can help you with the goals you may have in your business plan.

Perhaps you want to be at the top of the google results. Maybe you want to direct more traffic to your website. Or perhaps you want more referrals from your Facebook account. SEO experts will sit down with you and create a digital strategy to help you achieve them.

Supply Chain

If your business relies on selling a product, then you will need to ensure you have a detailed plan addressing your supply chain. By drawing out your supply chain, you will be able to streamline the process and also find any potential issues that could come up (tariffs, shipping, parts, etc).

If a supplier is increasing the price of a component you need or taking too long to deliver the goods to you, a good business plan will help you explore other options. Negotiate a better deal or seek an alternative manufacturer to streamline your process.

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Risk

Every business faces risk. The fact that you may be facing lots of risk doesn’t mean that your business idea isn’t viable; it simply means that you have identified and have a plan in place to address the risks you will face. The last thing you want to do is ignore or not have contingency plans in place.

One of the largest risks you will face is not getting your funding or your revenue not growing as planned. Cash flow is king and extremely important. If money or sales are not coming in as expected, how will you address that risk?

While these questions are difficult to answer, it’s vital that you can explore solutions within your business plan to give yourself and other stakeholders greater peace of mind should a problem come up.

Becoming an entrepreneur doesn’t mean simply having an exceptional idea. You need to use a business plan to work out how to implement your idea in the most effective way to maximize the success of your startup, and also give you the flexibility to address any risks that can threaten your business. A good business plan will give you the knowledge and tools you need!

David S. Chang

Award-Winning Entrepreneur, Wealth Manager and CEO | Chief Editor, Author, Keynote Speaker, Consultant ArtofThinkingSmart.com | Political Consultant | Army Officer National Guard | Living To Fulfill Needs, Solve Problems, and Live Passionately!

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