It takes careful planning to get your business up and running. Writing a business plan will allow you to get all of your thoughts out on paper before opening your doors. A business plan will allow you to determine who your competition is, where you will get funding and how your company will be managed.
Figure Out Who Your Customers Are
Your customers are going to be the lifeblood of your business. They will supply you with the money that you need to make a profit. Your first customers will tell other people to buy their products or services from your company. Without customers, you are going to be dead in the water before your company even gets going. Therefore, this needs to be the first thing that you think about when drawing up your business plan.
Determine How Much Money You Need
How much are you going to need to run your business? An Internet start-up may only need a few dollars to purchase a domain to get started. Designing a new battery for a car is going to take millions of dollars for research and development. If you need a lot of money, where are you going to get it from? Will you ask your parents for money? Will you ask a VC firm to invest in your idea? Having a plan ahead of time will be crucial if you want anyone to take your idea seriously enough to give you money to test it out.
Who Is Running The Show
Make sure you know who is managing the company. If you are the sole owner, you are probably going to be the manager who oversees operations. However, if there are multiple people starting the company, you have to make sure to delegate powers accordingly from the beginning. You also need to decide the percentage share of the profits that each person gets. Just because someone invests money into the company doesn't make them an equal. Making sure that those issues are settled will make things much easier if and when the company goes public.
Will The Company Go Public
That is another question that you should answer in your business plan. Most investors will want to know that they will see a return on their investment. The common methods of doing that are either going public or selling the company. Therefore, you should make sure that you have the answer to that question already settled before you open for business on your first day. If you do decide that your company will eventually go public, start thinking about an IPO price that you would like to hit. This will help guide future business decisions.
Your business plan is like a map that will guide your company to its eventual destination. Proper planning now will ensure a smooth trip with few detours. Running a business requires you to make many difficult decisions. Knowing what you want to do ahead of time helps make those decisions just a little bit easier to make.
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