Entrepreneurship

Practical aspects of writing a business plan proposal for a business.

Planning a Business

Most businesses fail because:
1.the business plan is not properly researched and implemented,
2.proper advice is unsought — not for reasons of cost or limited time, but because the company doesn't see a need until too late.

How complete? To raise venture capital, or secure a large private placing, you'll need to cover all aspects at length, backed up by documented research. If, on the other hand, yours is a part-time business needing no additional finance, then the plan can be a few pages. But one thing is essential.

A business plan is a support and guide in the years ahead — which means it absolutely has to be clearly thought-out and honest. Skimp or kid yourself, and grief will surely follow.

A business plan will be tested against and extended to meet new circumstances and opportunities, but initially at least will cover four areas:

Nature of Business
Marketing
Financial Control
Management

Taking these in turn, you'll be providing answers to:

Nature of the Business
what are you selling?
what's the company name and domain name?
how is it going to make money, precisely?
start-up date?
projected turnover and profit? By when?
overall goals and objectives?

Marketing

how are your products or services better/cheaper/more attractive?
how will you advertise, on and offline?
what's your pricing policy?
what's the competition, and how will you cope?
what are the prospects in your market sector?

Financial Control

who's supplying the start-up or seed capital?
how long before the business is profitable?
what's the break-even point in services or units sold?

for the first 3 years what are the projected:

cashflows
income statements
balance sheets
Management
how many hours per month will it take to:
fulfil orders
update content
market the site
handle the accounts
produce reports

Some Concluding Thoughts

1. Remember that the business plan is only as good as the research and thought underpinning it.
2. Internet business plans are no different from other business plans, and fail for the same reasons: under-funding, over-optimistic hopes, insufficiently-researched markets, poor implementation and/or financial control.
4. In the early stages, before you have researched matters properly, remember the old adage: Half the revenues, and double the time spans and expenditures: if the figures still look good then the business may be worth pursuing.
5. Take the planning as far as you can, but don't substitute planning for action. You can only really see if a plan works by trying it out.