For many people, part of the American dream is being their own boss. Running your own business in North Canton may be something that you have been considering for some time. Before you start your company and hit the ground running, it is important to take the time to formulate a proper business plan.
Business plans are important for two main reasons. First, it acts like a road map for your start-up. Second, it is incredibly useful if you are trying to get a small-business loan from a bank or attract investors. Fortunately, it is not overly difficult to create a business plan. Read below for a few steps that will help you create a plan and start you down the road to success.
Know the business you are going into
When you start a business, it is important to know that business like the back of your hand. This means you may have to spend a lot of time doing some research. For example, if you are going to start a plumbing company, not only do you need to know how to perform the services, you also need to know as much as possible about industry standards, the local competition, what goes into purchasing materials and supplies, and even how to set your prices. One of the best ways to gain this kind of knowledge is to talk to people who already have experience with the industry you plan to go into.
Tailor the plan to meet your needs
If you are forming a business plan simply so that you have a clear vision to help you keep things on track, then you do not need to spend time preparing it for potential investor review. However, if you need outside financing, be sure your business plan targets investors and lenders.
Consider your audience
If you are anticipating using the business plan to seek investors, be sure it targets the appropriate audience. For example, if you are planning to pitch your idea to family members to get them to invest, the plan may read differently than it would to venture capitalists or a loan officer at a bank.
Regardless of who your potential lenders or investors are, your plan should cover four things that these individuals or organization are looking for. First, the plan should demonstrate that the lender or investor can trust you. In other words, be sure to include examples of your ethical standards and integrity. Second, the plan should enforce that you have a strong understanding of the business you are starting. Include a clear method that you will use to offer your products or services and maintain a profit. Third, prove your understanding of the risks involved in investing in your business but also provide a map for how these individuals will be able to recoup their investments. Finally, provide a graph that clearly shows the expected return on investment so that investors can see they what they stand to earn by buying into your start-up.
Create the plan
Once you have addressed the above issues, it is time to sit down and actually create a business plan. Start by creating an outline that covers the topics you need to include. For example, if you are presenting the plan to investors, you might want to start with your Mission Statement, followed by the Executive Summary, your product or services, target market, and so on. Be sure to include any personal capital you plan to invest in the company as well as pro-forma financial statements so that investors can get an idea of what you expect in terms of income and expenses from operations as well as the condition of the company's balance sheet.
If you are planning to start your own business, it is important that you take the time to formulate a strong business plan. In addition, you must also file the appropriate legal documents in Ohio as well as with the federal government. Your attorney will be able to help you file the paperwork you need to list your company as a legal entity.