Why Write a Business Plan ?
Writing a business plan is difficult and time
consuming and you may be tempted to farm it out to someone else. In a word: Don't. Your
business plan not only provides you with a way of explaining your business to others and a
road map of your future, but the act of writing it will help you to clarify your ideas.
Your business consultant from the University of Scranton Small Business Development Center
will work with you to guide you through the process of writing your own plan.
Start your plan with a mission statement. This should be more than a basic "I will
sell widgets" statement. It should instead state the grand scheme of your business.
Rather than just selling widgets, perhaps your mission is to "Market a full line of
sturdy, affordable widgets that will fill every widget need existing today."
The Scranton SBDC has lots of resources available to help you with your business plan,
from books to software to free information from the government. Take advantage of these
resources and take your time. This plan will be the foundation on which you business is
built.
Remember, most businesses don't plan to fail,
they fail to plan.
So first off, ask yourself:
Is there a need for this type of
business?
Just because you've never seen a business like
the one you want to open doesn't mean it's a niche waiting to be filled. Could be you've
got an idea without a market. If you can't find any similar businesses in your area, you
might question whether your idea is in the right place at the right time.
If you do find similar businesses in the area, some questions to ask
yourself are:
Can I do a better job providing this service
or product than these
other businesses?
Is the area saturated with this particular
type of business?
Is there something different that I can
provide to make my
business stand out from the competition?
Can I afford to start this business?
It takes money to start a business and, unless
you have a rich relative ready to finance you, that money isn't always easy to come by.
A service business is least expensive to start up. Next costly is a retail business, then
wholesaling, then manufacturing.
A good rule of thumb if your looking for
financing to start your business is to have 30% of the total project cost in liquid
assets. Banks typically will only finance 70% of a new project cost, and they will
want collateral for that amount. Because it is a new business it is considered
risky, so banks will want to see that you are willing to take a risk just as they are.
The most import thing to remember
when attempting to finance your business is you will be required to have a good credit
history.
Smart entrepreneurs open businesses they already
have some expertise in. This doesn't mean, however, you have to open a business identical
to the job you want to quit. Perhaps you are passionate about a hobby that would lend
itself to a small business. (A wood-working shop? A fishing guide service? Could you build
a better something or other than already exists for your hobby?)
Also think about what skills and personality traits you would bring to a business. If you
never met a person you didn't like, then you have at least one quality it takes to succeed
in the service industry. If you're super-organized, you might have a career in helping
other people get organized, or maybe you could be an event planner. If you've got a magic
touch with animals, perhaps there's a kennel in your future.
Finally, be sure to think about what you most enjoy doing. Starting your own business is
tough and time-consuming and if you don't enjoy it, you won't succeed.
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