Key Components of Your Small Business Plan

One of the best ways of achieving lasting financial prosperity is through entrepreneurship. The financial, lifestyle and personal advantages of starting your own business make doing so an excellent way of controlling your destiny.

Starting a business requires you to complete a number of steps and make some key decisions. Though part of your overall plan, you’ll need to decide on a business structure, and obtain the necessary licenses and permits. In addition, determining which financing options will meet your short-term needs and long-term goals is crucial.

One of the keys to a successful business startup is having a business plan that provides a roadmap for your enterprise.

There are many different formats for business plans, and you will have to play around with structure and layout to find the perfect look for your company. However, when you are starting a new business, there are certain aspects that you absolutely should include in your plan, no matter what format you ultimately use. By remembering to include these things in your plan you can show stakeholders that you have thought out your business, since you answer all of their questions before they can ask them.

First, answer "What business are you in?" by describing your business. What is the market need that you are addressing? Will there still be a need for this service or product in five years, or will your company evolve to change with the needs of the consumer? Also remember that "what" includes a mission statement. What are your goals for the company and for yourself within the company? The most important of the "what" questions deals directly with potential investors-what are your start-up costs and projected earnings over periods of time?

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Did you know?

In starting a small business you should never think you can do it alone! One of the best ways to increase your chances for success is to find and work with a mentor, someone with business experience who can guide and assist you.

A good resource are the Small Business Development Centers run by the US Small Business Administration which can link you to organizations to help your small business grow and prosper.
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Next, clearly identify your customer. Answer the question "Who?" by noting what groups of people you will target with advertising and what groups are most likely to buy your product. Also be sure to address other "who" issues. Who are your investors? Who will run the company? Who will be the employees? Who is your competition? Answers to all these questions indicate that you have a clear understanding of your business operations.

Talk about "why" questions as well, although these may be more indirectly implied within the business plan. Why is there a need for your product or service? When talking about competition, explain why your product or service is superior or why yours targets a different demographic. Stakeholders will be asking "Why should I be involved in this enterprise?" so be sure to answer that question with as many positive details as possible.

Lastly, and most importantly, answer "How?" with great detail. You've said what you wanted to do, who your customers would be, and why the business would be an asset to the community, but this means nothing if you don't have a straightforward plan as to how you will go about doing this.

Again, try to answer questions before they arise. Assuredly, your potential stakeholders will still think of questions that you have not addressed, so be sure to know your plan, the business, and the market before you attempt to present your plan. Remember, lay the groundword and always be positive. If your plan is solid and you've answered the previous four questions, you are well on your way to positive reactions to your business idea.

Remember, that one of the keys to success in any endeavor is have the proper attitude and expecting success. Make sure that your business plan exemplifies this positive approach. Constantly visualize what your operation will look like when it's up and running and how you will feel at that point. Never waver from your pursuit.

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About the Author: Michael Saunders has an MBA from the Stanford Graduate School of Business. He edits sites on Starting a Small Business and Articles on Small Business Management.