Small Business Plan – Key Factors

A business plan is the backbone of every business, whether it is a small family business or a large corporate house. Proper planning is very essential to ensure the survival and growth of any business.

So if you’re going to set up your own small business, your first step is to make a business plan. If you plan ahead, the chance of success will be higher. A business plan includes several dimensions. I will list each of them. So let’s get started. My assumption is that you are the owner of your business and your business is a one man show or at best backed by your family members.

• Business objective:

Write a single small sentence that clearly states your business goal, it is the starting point of all business plans. I can give you a good example of this. A reputed brand before opening its new retail stores across India stated that it aims to provide fresh vegetables to end-users and make them happy. This is your basic plan. In fact, it is very simple, but it transpires the basic business objective. Similarly, you need to write down your business goal, it should be simple, unambiguous and realistic.

• Describe your product or services:

This is the second important step in developing a business plan. You must write in detail what are the products or services that you are going to offer. Write down the salient feature of each product, including the price, taxes, shipping and delivery costs, and the time involved.

• Set your financial goal:

First, a word of caution. Never set an unrealistic goal, otherwise you may get frustrated very soon. Set your goals that you think are achievable. If you’ve just started your business and really don’t have much of an idea how much it can yield, at least try to break even within three to six months of starting your business. Most small businesses experience an untimely death because they aim too high in too short a period of time.

• List all available resources:

Resources include labor, machinery, raw material or finished product, your knowledge or expertise in a domain. Whatever you have or know, and if it is in any way related to your current business, include it under the heading of available resources. Try to use each of the available resources in the most effective way. This will reduce the overhead of your business. For example, if you already have free space, you can use it for office purposes instead of hiring new office space from the start.

• identify the market

This is an important part of your business plan. You have to know where the market is, how big the market is. After all, it is where you will earn income from. The better knowledge you have about the market, the better your products/services will sell. Stay-at-home moms often succeed in the cosmetics/jewelry business because of their access to end users. I have seen many of them selling clothes, sheets and bedspreads and earning a lot. The key ingredient to their success is that they know the market. They may have access to a very small section of that market, but still that is enough for them to operate their business at a profit.

• marketing plan

Once you have identified the market, you need to set up a marketing plan. You can promote your products and services in a variety of ways. Most of them involve some cost. Therefore, if you want to run a profitable campaign, use flyers, posters and banners; post classified ads in newspapers also word of mouth is the free but most effective campaign mode. Therefore, try to talk about your products and services to as many people as you can each day. I have seen a reputable resort company start their marketing campaign based solely on word of mouth. And it worked.

• Financial plan

This is the most important part of any business plan. Every business needs a certain amount of investment in the form of fixed and current capital. So after completing all other plans, calculate how much capital you need to start your business and how much capital you need to run your business on a monthly basis. In any case, you must keep in reserve at least six months of working capital before starting any business. And now calculate the income that you can generate. If you don’t have prior data, take the break-even point as your initial sales target. Your financial plan should reflect breaking even within three to six months and profit generation thereafter. You must take into account all kinds of expenses and probable income from your business.

• Strategic planning and implementation

Be very specific in preparing a strategic plan for how to run your business. It involves management responsibilities, daily work schedule, marketing and promotion calendar, progress tracking, and review calendar.

• a final summary

After covering all the aspects, start a survey campaign. Talk about your new business and its various dimensions with your friends and family. Take your comments. Modify your plan, if necessary. But stick to the plan after you’ve finished it, for at least a period of two years.