The success rates of new businesses are known. Depending on the financial climate and other factors, only ~20% of businesses started today will still be around few years down the road. And even within those 20%, some will merely be around, slowly grinding through the daily cycles and not getting ahead at all. Only the top of the top will be seen to experience perpetual and rapid growth.
So what is the difference between the successful and unsuccessful enterprise?
There are many explanations to this, and a good portion of them relate to the absence of adequate and thorough planning. Planning that would evaluate the market niche, estimate the company’s relevance and gauge its funding and sustainability. It is a sad reality that while the business plan is an essential part of a successful business operation, it is still often skipped by new business enterprises.
A clearly developed, thorough business plan will serve as a game chart, setting up a step-by-step process right from the onset. The only thing that’s left, is to write one. To make this process easier, Business Plan Writers bring you the 7 key components that make a solid business plan.
- Start-Up Costs
If we had to name the single biggest reason that new enterprises fail, it would be the all too common problem of undercapitalization. If you set up an operation and somehow get stuck without funds halfway through the quarter, it can spell disaster for your entire enterprise. This can happen if you don’t secure adequate funds in advance. Calculate everything, including fixed costs, hydro and rent (the first months are considered startup costs), marketing, hiring costs and then add a 10% on top of that for unexpected expenses. Anticipate the worst case scenario and be very modest in forecasting revenues.
- Running Costs
Look several years ahead, making sure you have the funds to cover day-to-day operating expenses. Make sure you know how much it will cost to sustain the group, factoring in pay-raises and rent increases as well.
- Difference and Relevance
Now that the financial part is covered, make sure you put the funds to good use. How do you plan to make your product or service relevant, attractive and desirable? What makes you stand apart from the competition? Is your company addressing the right needs and priorities of your intended customers?
- Operations and Management
Plan your workspace according to your scope of operation. Take care to leave some room for growth, but be modest about it. Renting a place that will have just enough space for your current staff will leave you will no room to hire more when the need arises. A place the size of a small golf court is also a bad idea. Balance this out with your growth forecasts and rental costs.
- Metrics Timeline
Set up a system that will allow you to adequately evaluate how your organization is doing at every single moment. Keep track of it, gaging your progress and comparing it to your initial business plan. Having your hand on the pulse will allow you to introduce tweaks and changes to the operations, adjusting its course and momentum.
- Plan “B” Options
Being open to modifications is important. Prepare for the need to play out alternative scenarios and you will not waste time adapting, being able to react immediately to foreseen changes and opportunities.
- Clear Action Chart
Develop an action plan that you will be able to refer to and follow as you go along. Make sure your key team players are well familiar with it as well. Good luck!