Why Do You Need A Business Plan?

If you enjoy being surprised, you can start any business without a plan.  You can also drive to New York City — without a road map. But if you decide to use a highway road map, you will arrive safely and quickly at your destination; if you have a GPS navigation system, you can enter the destination address to watch a moving map and hear voice directions to your destination.  No one has invented a GPS navigator to help you start and run a business; if you want to start a successful business – you have an accurate and up-to-date business road map as your ‘navigator’ to help you avoid some of the ‘detours’ most likely to distract you from reaching your goal of building a successful business.

Creating a detailed business plan will help you discover many ways to eliminate or prevent some business detours, and you’ll reduce your risk of failure.  Your business plan will guide you along a planned route, and keep you on your timeline for creating a successful business.  The following pages give general information to start any business venture, and detailed information to help you start a home-based handyperson business.  Before you spend lots of time and energy to create your business plan, you should write your answer for this question:

WHY do YOU want to start your own business? Mark your answers belows!

• I like the idea of being my own boss: Yes__ No__
• I want to make extra/more money: Yes__ No__
• I’m bored with my job, and I want more challenges: Yes__ No__
• I have other reasons:

I want to start my own business because:
________________________________________________________________________…

We’ll assume you have listed at least one passionate reason to start your own business.  There are many ways to start a business; you can buy an existing business; you buy a franchise (see enclosed appendix 5); you can even turn a hobby into a part-time or fulltime business.  Owning your own business can bring rewards; there are also risks for starting a new business. More than 50% of all new businesses fail (cease, quit or declare bankruptcy or whatever words you want to use) — they go out of business — during the first three years.
Here are some reasons why new business ventures fail:

1) Not enough business planning…

You’ll have to invest your time and your mental energy and some money to start your business; this information will help you make a detailed business plan.

2) Uncontrolled or low cash flow…

You’ll need cash flow projections to qualify for a business loan. You’ll also need to manage your business cash flow to grow your business.  This information will help you understand how to estimate and manage your business cash flow.

3) Ineffective marketing or advertising…

This information gives you some basic marketing and advertising tips; you should plan to spend 6-8% of your gross sales on marketing and advertising during your first year of business.  After your business is established, you should plan to spend at least 5% of your yearly gross sales on advertising.

4) Lack of business management skills…

This information is the starting point to help you discover some facts about YOU.  Do YOU have a balanced set of skills needed to operate your own business?  This is the same question you would have to answer — if you were applying for any job; are sure YOU are qualified to work as your own boss?

• Can YOU make tough decisions, with limited information?
• Can YOU handle the stress of dealing with customers?
• Are YOU good at planning and organizing your time?
• Are YOU persistent and self-disciplined?
Who is better qualified, than you, to make a list of your own abilities. (But don’t be afraid to also ask your family and friends for make a list.) Look at the following chart, make some copies of the chart and mark each of your skills and interests: seldom, sometimes or usually, to describe how you feel about your own interests and skills.  After you have marked your own answers; ask your family and friends to complete a copy of this chart. Don’t be surprised if friends and family tell you that you some hidden talents that you’re not even aware of. Use this information to see where to focus your energy and where you might need to ask for help, or pay someone for consulting advice.  Remember, there are no right or wrong answers, so don’t spend too much time with the chart.

WHO ARE YOU & HOW DO OTHERS SEE YOU?

Write an X In The Column That You Think
Best Describes How You See Yourself…

Your Natural Abilities   Seldom     Sometimes   Usually
Artistic                               ______           _____        _____
Athletic                              ______           _____        _____
Creative                             ______           _____        _____
Curious                              ______           _____        _____
Decisive                             ______           _____        _____
Energetic                          ______           _____        _____
Generous                         ______           _____        _____
Humorous                      ______           _____        _____
Inquiring                         ______           _____        _____
Intuitive                          ______           _____        _____
Inventive                        ______            _____        _____
Listener                          ______            _____        _____
Logical                            ______           _____        _____
Organized                     ______            _____        _____
Outgoing                        ______            _____        _____
Patient                           ______            _____        _____
Persistent                     ______            _____        _____
Persuasive                   ______            _____        _____
Precise                          ______            _____        _____
Serious                         ______             _____        _____
Planner                        ______             _____        _____
Leader                          ______             _____        _____

Your skills, interests and natural abilities are a good indicator of success for running your own business. There are no wrong answers; everyone has lots of valuable skills, but not everyone has a good balance of skills needed to run their own business.   Look at your balance of skills and interest; then decide if you have enough passion and the right skills to operate your own business.  Look at how many times you marked “usually” versus “seldom” — look to see if you have a balance of skills and interest.  Remember, your skills and interests can also be a limitation; for example, if are very creative, but not very organized – you may want to consider hiring someone else do your bookkeeping and send the customer invoices.

If you’re interested in learning more information of how to start your own business or expand an existing business…   send an email request to: phlowen@n-connect.net — for a free 56 page business plan.