So, you’ve got an idea for a business. Congrats! You have something to offer the world, and can’t wait to share it. But, hold on future business owner. There’s something you need, that your business needs, that you may have not already considered.
Whether you’re moving forward with an idea that you’ve been mulling over for years or are ready to expand on a concept you’ve seen recently, it is imperative that you have the roadmap for your future business sufficiently plotted out before you set up shop.
Step One: Develop a Business Plan
We cannot stress this enough: Having a business plan is critical to the success of a small business, particularly if you plan to scale, and yet thousands of new entrepreneurs fail to adequately plan for their ventures. We’ve had countless clients come into our offices seeking advising or loans for their businesses, only to find out that there’s a huge flaw in their plans: they don’t have one.
It’s easy to think that once you’ve secured a prime location, eager clients, and ample funding secured, the hard part of getting your business started is over, but that’s a false flag. You wouldn’t go on a road trip without a map or navigation system, so why you would start a business without developing a plan for it first? Do you know why eighty percent of new businesses fail within their first eighteen months of operation? While some of it is due to pure bad luck, most of it is due to a failure to plan. If you’ve ever watched “The Biggest Loser”, then you’re familiar with this frequently-repeated (okay, frequently-screamed) phrase: Failure to plan is planning to fail.
One of the main reasons entrepreneurs don’t develop business plans is because they simply don’t realize its importance to their success. It’s common for someone running a cash business to think that since what they’ve always done has worked in an informal setting, it’ll work once they go legit and establish themselves with a brick-and-mortar operation. It seems sound on the surface, but it’s actually a recipe for disaster. Instead of focusing on breaking even or making a little money to live off of, they should be prepared to answer the bigger questions that investors or lenders will ask. Do you know who your customers are? How do you plan to grow? Who are your competitors, and how is your business different? How will your business be managed? These are issues that are typically addressed in a business plan, and if an entrepreneur can’t address them, then the prospects for the business are grim.
Some people are aware of the concept of having a business plan, but avoid because writing one seems intimidating, time-consuming, and largely unnecessary since they aren’t out to get rich. This is a natural mindset, but a detrimental one to have. If you say ‘executive summary” or “market analysis”, to them their eyes glaze over. Such an individual might say, “Mark Zuckerberg may need a business plan, but I don’t”, and they couldn’t be more wrong. Even the small-time entrepreneur stands to gain the world by having a plan for his/her new business. And
who knows? Their idea might make them into the next Zuckerberg, but they’ll never know it because they didn’t have a business plan.
Now that you know the importance of having a business plan, you’re probably wondering how you, an aspiring entrepreneur, can write one. We’re glad you asked! The SBA has a wonderful guide on how to develop your plan, which can be found here:
Of course, your friends at BiGAUSTIN have a robust business plan template that is easy to navigate available for free. Our counselors will even walk you through the process and are available to answer any questions you may have. Stop by the office, schedule an appointment, or just give us a call at 512-928-8010 to learn more.