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Using a Business Plan to Answer Key Questions
A major reason for having a business plan is to make sure you are addressing the multitude of questions that have to be answered before you can point your business in the right direction. Trying to start a business without considering every detail is like looking for something in a disorganized room with the lights off: pretty soon you’ll trip, and if you fall, it’s likely you won’t ever get to what you were looking for. On the other hand, if you make a plan and follow it like a map, you will get to where you want to go.
Your business plan will answer these questions:
- What sort of business are you planning?
- What is your actual function?
- What business industry are you truly in?
- What services and/or merchandise are you offering?
- What is your target demographic?
- How do you stand out from the others?
- What will make consumers want to patronize your company?
- What marketing approaches are you planning to implement?
- How are you planning to expand in the future?
- Is the funding available to get you going?
- How much capital do you have right now?
- What can go wrong?
- How will you handle unexpected problems?
- Have you identified the other competitors in your field?
- What is the best way to set yourself apart from your competitors?
- Have you sufficient capital to implement your plans effectively?
It’s vital to have responses to each of these questions. If you haven’t answered these questions before you start, you can find yourself facing obstacles you never thought about and are totally unprepared for. They can have the power to shut you down before you are barely started. By forming a business plan, it forces you to place your ideas underneath the spotlight. When you put together a business plan, you have to look at your ideas in a revealing light. You can come up with improved services and products, become better acquainted with your target audience, and have an idea of how to handle your competitors.
When you are proactive in planning your online business instead of reacting and always being a step behind, your business has much better odds of achieving success. Fewer than 10 percent of all start-ups succeed, but the failure rate isn’t always because of bad ideas; it’s most often due to lack of planning. Strong planning assures that you will make the right business choices throughout all the phases of the life of your business. Your success depends on the strength of your business plan.
However, not all planning is on target or effective. A strong plan includes investigation and realistic information about the questions posed by the plan. Poor planning involves taking things for granted without checking, making things up, failing to investigate, using imagination instead of reality, or even fooling yourself to make yourself think you’re getting things done. For example, don’t say in your plan that you are going to work ten hours per week on your venture if you really only have five to spare because of your employment or family responsibilities. You have to state things honestly and practically.
Sound business planning will enable you to set the direction you intend your business to go. A strong business plan will tell you if you have the resources you need when it comes to people, finances, credentials, and skills. No matter what, you must be honest with yourself and do your planning with real facts.