Getting your venture off the ground with basic business planning

* Intuit is providing a series of articles for the Biznik community during the month of April. Laura and I will be pulling together the best articles we can find from across the company, ones we think might help you. *  Planning doesn’t have to be difficult, but it should be part of any new business. Congratulations! You have a great idea for a business, and now it's time to turn your vision into reality. But how? The actual details of <a href="http://jumpup.intuit.com/tools/planning/tools_services" title="http://jumpup.intuit.com/tools/planning/tools_services">starting a new venture</a> can seem complex and intimidating. Just where to begin? Launching a successful business requires planning. Contrary to what some people believe, basic business planning doesn't have to be a long, complex, or painful exercise. In fact, the foundation of solid business planning rests on two tasks that anyone can readily accomplish: putting together a basic business plan and giving yourself an <a href="http://jumpup.intuit.com/tools/get_paid/tools_services" title="http://jumpup.intuit.com/tools/get_paid/tools_services">overview of finances</a>. This will give you a good sense of what you can accomplish with your business idea, not to mention making you a better entrepreneur. Below you'll find two short lists of important planning questions to ask yourself. Once you come up with the answers, you'll discover that you have a much clearer idea of how to start and run your business. Answering five questions forms the basis of a solid business plan Do you need a business plan? You may not need a formal, written document if you're self-funded, but having the information found in a business plan will increase the chances of your venture's success. A business plan is easier to put together than many people realize. Most of the information you need can be obtained by answering five essential questions: <ol> <li>What is the purpose of your business? This is probably the most important question to answer. Whether you're self-funded or getting financial help from other people, you owe it to yourself to have a clear idea of what you're trying to achieve so you can keep your business focused. This is frequently called a statement of purpose and is often the first thing in a formal business plan. </li> <li> Who else sells similar goods or services? Even if what you plan to sell is radically new and different, there still will be other companies vying for the same customers' dollars. Taking a look at who these competitors are and how they do business will help your venture succeed. In a formal business plan, this is often called a competitive analysis. </li> <li>Where are the customers who are most likely to purchase your products and services - and how do you attract these people? Much of the inspiration for your answers here will probably come from your evaluation of competitors. This section is usually entitled marketing strategy in a formal business plan. </li> <li>What are the specifics of how you plan to operate your business? Here you should include what your product or service will be, whether you plan on having employees, who will supply your goods, and where you will be located. No surprise here on what this section is called in a formal business plan - it's a description of operations. </li> <li>How will you make a profit? Once you've answered the first four questions, then all that's left to do is some basic financial forecasting. This means making your best estimates of start-up costs, revenues, and expenses, as well as your ability to make a profit. In business plan-speak, this part is usually called the financial details. If you read just a little further here, you'll see how easy this can be to figure out.</li> </ol> It's important to note that a good business plan doesn't need to be lengthy.  Each section in the document can consist largely of bullet points.  Getting to the point quickly will provide more value than long, drawn-out descriptions.  If you think you'll need lenders or investors, you'll want them to be able to immediately see why your business concept is a great idea <a href="http://jumpup.intuit.com/.59947fba/tool" title="http://jumpup.intuit.com/.59947fba/tool">Sample Business Plans</a> Simplify financial planning by answering four important questionsA good business plan shows two things: a great business idea and a clear shot at profit. This requires understanding the financial details, which will help you see how much money you'll take in and how much money you'll spend - which is how you calculate your potential profit. Figuring out details about money is often called financial forecasting, and you can understand the potential of your business by answering four basic questions: <ol> <li>What will it cost to start your business? These start-up costs are simply the total of all the expenses you think you will incur before opening your business - things like rent, supplies, and inventory. </li> <li> How much money will you need each month? Sometimes called a cash-flow projection, this will show you how much money you'll have each month. Answering this question will also let you know whether you'll need a credit line or other financing to cover any shortfalls. <a href="http://jumpup.intuit.com/.59947adf/tool" title="http://jumpup.intuit.com/.59947adf/tool">Cash Flow Calculator</a> </li> <li>When will you make your money back? It's very important to figure out a break-even scenario. The sooner you do, the easier it will be to move forward with your business. By using income and expense estimates you'll determine how your business can bring in enough money to meet operating and start-up costs-and then make a profit. <a href="http://jumpup.intuit.com/.59947da5/tool" title="http://jumpup.intuit.com/.59947da5/tool">Break Even Calculator</a> </li> <li>What will the first year of business operation look like? Sometimes this long-term view is called a profit-and-loss forecast. Here you'll come up with an answer by taking a close look at your sales and expense estimates to see how you'll do in your first year of operation. Ideally, you should discover that your business will have higher revenues than expenses.</li> </ol> Giving yourself a financial reality check can be a little uncomfortable the first time around, but remind yourself that cold, hard facts can lead to cold, hard cash. And investing the time to conduct your financial forecasting will reap other benefits, such as helping you know how best to move forward with your business and <a href="http://jumpup.intuit.com/step/help_training/whyhow" title="http://jumpup.intuit.com/step/help_training/whyhow">what to avoid</a>. Being a successful entrepreneur makes planning worthwhile If you've honestly and accurately assessed how your venture will do with financial projections and a business plan, the beauty of your business idea will become even more obvious. But if there are areas of your original idea that just don't seem to make as much sense when you take a step back and review your plan, don't despair. You may just need to make a few adjustments. Or, you may even discover a better business idea as you flesh out the details of your original concept. Regardless of the conclusions you draw from your initial financial projections and plans, it's important to remember that business planning is part of business expansion. As any successful business owner will tell you, planning is a routine part of doing business for the long run. Article from www.jump.com: JumpUp is a free website and community from Intuit that helps new businesses get up and running successfully. 2008-04-07T07:16:22Z

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getting-your-venture-off-the-ground-with-basic-business-planning

2008-04-08T01:33:12Z

Intimidated with the idea of business planning? Answer these questions and you'll be well on your way to putting together a basic business and financial plan.

Getting your venture off the ground with basic business planning

2009-02-24T09:43:42Z