When it comes to starting your own business I am sure you have seen the statistics that state that over 50% of all new businesses will not make it past their first couple of years. The two major reasons given for this is a lack of planning and a shortage of capital.
So let me ask you this, “Do you think people would start a business knowingly with out enough money to survive?”
Of course they wouldn’t. But isn’t it obvious that if they had planned ahead this is a scenario they could have dealt with on paper?
Having a business plan is a great way to gain control over the fortune of your start-up. It will not be fool-proof by any means but it will allow you come up with solutions for potential problems before they happen. In like manner, it will also prevent you from losing control of the situation due to bad decision making made in haste. Learn how to increase your online business success here
Let’s make sure we are all talking the same language. Wikipedia defines a “business plan” as follows:
“A business plan is a formal statement of a set of business goals, the reasons they are believed attainable, and the plan for reaching those goals. It may also contain background information about the organization or team attempting to reach those goals…”
This plan is usually a document that should be created before the start-up phase of a business. A lot of times this plan is used as a way to attract investors to put money into a business. However, since most online business ventures are of the solopreneur variety they don’t usually need investors, so they often skip this important business planning stage. For most online business owners this is usually a big mistake. Outside of attracting investor dollars there are ten important reasons why you should look into creating a business plan when starting an online business.
- Create A Plan Of Action
At its core, a business plan is a plan of action that, when and if you get lost, you can look back at it to help clarify where you are, and where you’re going. The plan doesn’t always have to be followed to a T, but the essential components of the business plan can keep you focused and clear on the actions you need to take to get to where you want to go.
- Gain Clarity
If you were not sure why you are embarking on a specific business journey, the business plan will help clarify your intentions and answer the all important question: Why? Knowing your why is an important aspect of anything you do in life, including starting an online business.
- Identify Your Target Market
Most people go into business with a product or service already thought out. But the truth is, it’s better to know who your target audience is, their needs, hopes, dreams, desires, and fears, and then create a product or service that solves one of their problems. So, if you’ve done it the other way, you’ll need to define your target audience, which will help you learn the best way to market your product or service.
- Define Your Offer
Once you get into the nuts and bolts of business planning, you’ll be able to better define your offer. The offer is the specific set of product(s) or service(s) you plan to use to solve your target market’s problem(s). The business plan will help you create a more compelling offer than not using one. You will want to create a prototype, and perfect the product or service until you know how you’ll create it, how you’ll deliver it, and how you’ll collect the money. Additionally, this process will help you identify opportunities to up-sell.
- Determine Competition
Every business should take a look at their competition, not just at start up phase but throughout the life of their business. Knowing what they are doing, and how they’re doing it, can help you differentiate yourself enough to stand apart from them.
- Minimize Mistakes
As you write out the processes from beginning to end, through the business cycle, you’ll see where mistakes can be made and you’ll eliminate and/or minimize the possibility of errors by creating processes that prevent them.
- Define Procedures
Every business needs standard operating procedures. How will you accept money, how will you pay your bills? How will you deliver your product or service to the client. How will you identify clients? How will you communicate with clients? The list goes on.
- Determine Additional Resource Needs
As you determine each aspect of your offerings and how they run through the business cycle, you will identify areas where you cannot deliver alone. You may need a bookkeeper, an accountant, contractors, a manufacturer, and so on. You’ll not only know what you need, but who you will use as you create the business plan.
- Discover Technology Needs
As you go through the business cycle in your business plan you’ll also discover needs for technology such as hardware, and software. Perhaps you want to start a graphic design business. You may identify various software apps from Adobe or other software developers that you need. Along with that comes a price point, which will determine the start up costs of your business.
- Illuminate Your Mission
The process of doing the business plan forces you to figure out what your mission is, how you’ll deliver it, and why you’re delivering it. By illuminating these important questions you answer the who, what, where, why and how of your entire business from the ground up.
Click Here to discover a quick and pain-less way to create a business plan for your online business.