Business startups are risky. U.S. Small Business Administration (SBA) records show that 20% of startups fail in their first year, 30% fail in two years, and 50% fail within five years. A robust business plan will greatly reduce and help manage this risk.
There’s an old saying, “If you don’t know where you’re going, any road will get you there.” Developing a complete written business plan is an important step in starting a business.
US Small Business Administration records show that businesses with a written plan grow 30% faster than those without a plan. The following steps can improve the chances of success.
Define your business.
Write a vision and mission statement. What are your products and services?
Select a legal structure.
This is one of the most important questions to answer when planning a new small business startup. The structure you choose will affect everything from paying taxes to assigning responsibilities, from raising capital to sharing profits. Each type of structure has trade-offs that should be fully understood and reviewed with legal and tax professionals.
Determine your target market and select the specific niches you want to serve.
Think through which groups will benefit most from your business. Read also : PayPal is ending free friend and family payments for business accounts. This should include demographics and geographic area.
Research potential customers, competitors, and suppliers.
A database like A-to-Z Databases, http://atozdatabases.com/home has information that can be searched in detail. All it takes to gain access is a library card from a Berks County library http://readingpubliclibrary.org/. Contact the Reference Department at the Reading Main Library, 610-655-6350 for additional information and assistance. This may interest you : Rosen joins bipartisan letter urging SBA to process all eligible applications for small business COVID loans. Some public sources of information are the U.S. Bureau of Labor Statistics, https://www.bls.gov/; and National Bureau of Economic Research, https://www.nber.org/.
Develop a detailed marketing plan and budget for each of your target markets.
This is a particularly critical step because many businesses that fail don’t fail because they don’t know how to make their product or service, they fail because they can’t get enough orders. To see also : Ex-Wolverine Cammalleri expands sports nutrition business with NHL deal.
Develop a network of contacts with people that might help you in your business.
Some local organizations that can help include: The Greater Reading Chamber Alliance https://greaterreading.org/; PA Small Business Development Centers https://www.pasbdc.org/; The Berks Launch Box, https://berkslaunchbox.psu.edu/; and Small Business Resource Association, https://www.sbrassociation.com/. The Berks and Schuylkill Counties SCORE website, https://berksschuylkill.score.org/startup-resources, has numerous resources for entrepreneurs looking to start a business.
Make sure you have the appropriate professional advice.
Use the “BLAIME” checklist to make sure you haven’t overlooked a key area. B is a banker, L is a lawyer, A is an accountant, I is insurance, M is a mentor and E is e-commerce. It is important that you comply with local laws and regulations and keep the necessary records, especially for tax purposes.
Make a financial projection by month of all income and expenses so you can see how both your profit and cash flow may turn out.
Include a line for some unexpected and unknown expenses that are almost certain to occur. Determine how you will obtain the necessary capital – whether it comes from savings, friends and family, other investors or bank loans.
SCORE is a strong believer in a written business plan and encourages clients considering a startup to make this a critical priority—providing a project portfolio to help guide them through the process. Some clients approach SCORE thinking that we are consultants who will write a plan for them. SCORE mentors are advisors, not consultants, and believe it is very important for clients to write the plan themselves so that they truly “own” it. SCORE mentors walk through the process with them, helping to question, edit, correct, expand and involve relevant professionals such as lawyers and accounts.
For some business plan ideas, visit https://www.bplans.com/ to view a selection of professionally prepared business plans.
To check how strong your entrepreneurial ambitions are, there is a short quiz available that can help provide some insight. Find that quiz at http://www.nmu.edu/sites/Drupalceee/files/UserFiles/Files/Pre-Drupal/SiteSections/MarketplaceProgram/how_entreprenuerial_are_you.pdf
SCORE is part of the U.S. Small Business Administration (SBA) with 10,000 volunteers nationwide who provide confidential, unlimited, free business counseling and mentoring services to entrepreneurs starting or growing a small business.
The Berks Schuylkill chapter in Reading was started in 1965 and has more than two dozen business owners and leaders dedicated to helping small businesses get started and grow. SCORE mentors understand the needs and challenges of running a business because they have done it themselves.
For a confidential review and help developing a business plan, schedule a meeting with a local mentor by visiting https://www.score.org/# or call 610-376-3497 for the SCORE Berks Schuylkill Counties Chapter in Reading; 610-327-2673 for the SCORE TriCounty chapter in Pottstown; or 610-344-6910 for the SCORE Chester Delaware Counties chapter.
Willis Kanaley is a mentor in the Berks and Schuylkill SCORE chapter.
