Many women want to have their own business. A good place to start is by developing a formal business plan. A business plan outlines a company’s goals and objectives, the strategy and activities to achieve the plan, as well as the expected financial results from doing so. In order to develop a business plan, it is necessary to understand the environment within which the company operates, the skills and competencies of the business itself, the necessary financial resources, and the expected financial results.
Key areas to address in a business plan include:
- Industry description, including history, size, characteristics, and recent trends.
- Market assessment, including the area in which the business operates (i.e., geographic location, product/service related markets, etc.), key characteristics of the market, critical success factors, competitors, etc.
- Target market definition, outlining the details of potential customers, demographic information, buying habits, selection criteria, etc.
- Product/service offerings, including features and characteristics, product line information, competitive advantage, etc.
- Management team overview, identifying management team members, their skills and experience, key responsibilities, and roles they hold.
- Marketing/promotion strategy, including details of advertising and promotion initiatives, pricing strategy, how products/services are distributed to customers, etc.
- Financing/capital requirements, including an estimate of the amount of financing required and how it will be provided, if known.
- Financial results, including a forecast of estimated financial results and the assumptions upon which the forecast is based. Typically includes an Income Statement, Balance Sheet, and Cash Flow Statement.
A business plan will help you to better understand the environment within which your business operates, including your customers and competitors.
A few more important steps to guide smart, profitable growth include the following:
- Make sure you have timely, financial reporting in your business on an ongoing basis (at least monthly) so that you can quickly assess your performance and make corrections where required.
- If developing a business plan sounds daunting, engage a qualified business advisor to help.
Recognize that raising capital is a complex process that could take more time than you anticipate, and the first step for many investors is to request a current business plan to help them to understand your company.