Why a Startup Business Plan is Critical to Your Success

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By Romal Bryce

After spending countless hours investigating multiple industry sectors, franchise networks, business models, and geographies that align with his vision of entrepreneurship, it’s time to make the brave decision to venture into the world of self-employment. .

When figuring out where to start, many contractors get caught up in the weeds looking at the many things that need to be addressed: sourcing materials, talking to landlords, and arranging financing, to name a few. .

These are all things that need to be done in the future but not before the most important activity: planning. In today’s business environment, preparation, a thoughtful approach, and a plan to adapt will provide your business with the solid foundation necessary not only to survive, but also to thrive.

Most Canadian banks offer user-friendly business plan templates online that can be customized to a particular industry.

Lay the foundation

Preparing a business plan is an essential first step for anyone looking to start a small business. Putting your thoughts on paper emphasizes the importance of thinking through the key elements of the business. It should be seen as a roadmap to success.

A business plan is also a living document that can be modified, adapted and amended as the business environment changes. In particular, having a plan during the pandemic would help franchisees and small business owners cope with changing circumstances. It also performs an external function, which is to convince potential investors or lenders that the business is worthy of loans or investment funds. A well-thought-out plan shows his vision for success.

When developing a business plan, it is important to capture the following:

• Executive Summary—This is a summary of what is expected of their business and serves as a high-level overview of what is contained in the business plan. It should be written after the other sections of the business plan are completed.

• Company Description—This should include details about what the company does, as well as its goals, mission statement, points of differentiation, and an overview of the company’s target market. Equally important, a description of the products and services offered by the company should also be included in this section.

• Market Analysis—Ideally, one should discuss in detail the industry in which one’s business is located and the size of the market opportunity. Finding statistics and data for your market is vital; it will confirm the existence of an opportunity or allow you to pause to reflect. Facts are friendly and data is essential for making good decisions.

• Competition—Who are the company’s competitors? What are their strengths and weaknesses? How can the company take advantage of any gaps?

• Management Overview—Depending on the size of the business, assistance may be required to complete the operation. This section should help to think about the organizational structure and the need for separation of management tasks (for example sales, marketing and human resources). In this section, talking about your own expertise is a good thing. Remember: most investors and lenders view management as a key part of any business.

• Marketing and Sales – Here it is important to describe how the company’s products or services will be sold. Consider the overall strategy, then break it down to determine how the strategy will be executed; for example, things like hiring a sales team or raising awareness around the business. Being specific questions in this section and it should be well thought out.

• Monetary/Financial Projections — Here you reveal your financial goals and expectations. Creating a best, worst and likely scenario for sales and profitability is important not only for yourself, but also for other interested parties. Completing monthly cash flow projections will help them understand their business cash flow needs and determine the amount of capital needed. If financing is needed, these projections will show lenders and investors the amount required as well as how much the business owner is investing in the business.

Preparing a business plan is an essential first step for anyone looking to start a small business.

A good plan should reflect change

No owner can prepare for all future outcomes; any plan should reflect the ever-changing nature of business. During the pandemic, many have learned that businesses that have good strategic plans and are adaptable have a better chance of surviving than those that don’t. Disaster contingency planning is not a typical part of a business plan; however, as an owner, it is important to think about the future and the ever-changing landscape. Having an idea in mind of how one would pivot one’s business and what the short and long term impacts would be for both oneself and one’s business can be crucial in overcoming obstacles.

Developing a business plan doesn’t have to be a daunting task. There are many business plan templates available for free on the Internet that follow the same guidelines referenced in this article. Most Canadian banks offer user-friendly business plan templates online that can be customized to a particular industry. Whether one chooses to use an online template or develop their own plan, it should be customized as needed. Keep in mind that the amount of information you put into your business plan is less important than the quality of the information and the thinking behind it. Now it’s time to start planning.

Romal Bryce is National Director of Growth and Strategy, Industrial Programs, for Bank of Montreal (BMO). Visit bmo.com/franchising for more information.

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