While startups are making a splash in the business world, there is still no lack of criticism. Every business publication touts the small business failures and disheartening statistics. As a small business owner or budding entrepreneur, however, you can avoid being just another statistic.
Startup Genome found that 1 in 12 startups fail – another saddening statistic; the sources of this failure being customers, product, team, business model and funding. Unfortunately, not all of these are within your control.
In fact, many of them may spiral out of your hands before you even get a chance to steer it back on course. But, the one thing you can change is your business model. How do you do that? Write an effective business plan.
“Creating a business plan allows you to identify potential problems and opportunities your business might face, avoid penalties, fines or other legal problems, adapt to changes in the marketplace and let you expand or contract from a position of objectivity.” – Smallbusiness.chron.com
Deviate From the Traditional
When starting your first business plan, you’ll probably take to the internet. There you’ll find business plan templates, business plan suggestions, sample and more. While these are good sources to start with, I find it’s best to focus on what your business plan needs instead of focusing on someone else’s.
There are different kinds of business plans, and you should choose the one that best first your business model and intentions. Entrepreneur.com suggests these three types:
- Mini plan: your miniplan should cover the most important aspects of your business, such as finances, cash flow, and overall concept. This is meant to be a quick introduction, and should be accompanied by a more in-depth write up.
- Working plan: Use this to lay out the details of your business operations, which are often the root cause of business setbacks. Avoid hiring and product issues down the line by taking your time with this.
- Presentation plan: This is a polished document, meant to impress and inform potential investors, lenders, or financial backers.
Use Mind Maps
The traditional business plan lays out basic information and has been integral to business owners for a long time. Yet, it may not be in depth enough to keep you from being another one of those miserable facts. So, it’s time for some mind mapping. This is effective in business planning as it allows you to assess every facet of the business, where it could go wrong, and how you’ll handle it, but in a visual fashion.
When you do this, you end up building your business model around potential pitfalls. With such a high failure rate, this will be key in identifying problems before they arise, and handling them correctly if they do. As Entrepreneurship.org said, “A well-written business plan doesn’t oversell the good, undersell the bad or ignore the ugly!”
- Start with all your basic business sub-categories: Finances, product, staffing, etc.
- From there, build your circles out with an arm for potential pitfalls, room for advancement, and your over-all vision for that sector.
- Continue this until you can go no longer. This may take days or weeks, spending a little time here and there, and that is okay.
The greatest benefit of any business plan is goal setting. When you set goals, you have a framework to operate in and a vision of what’s to come. This is essential to any successful business plan. In an interview with Inc.com, founder of The Killer Pitch suggested, “You have to know what you’re going for, and do it with your eyes wide open.” To make your goal setting effective, be sure that you focus on making them:
- Attainable: Set goals that are achievable. It’s easy to be discouraged when you aren’t meeting goals – so start small.
- Far fetching: On that same note, do write some goals that may seem out of your reach right now. Having something to strive for will always benefit you in the end.
- Time sensitive: Make goals for next week, next month, and next year. Having a due date holds you accountable.
Writing a business plan may seem like a daunting task, but it’s one worth taking on. To avoid being another statistic take time to write out your goals, obstacles, desires and vision. Not only will this keep you on track, but help you stay in focus when other problems start tearing you down.
About the Author: Jessica Sanders is an avid small business writer touching on topics that range from social media to business management. She is a professional blogger and web content writer for ResourceNation.com.