Writing a Business Plan for Your Startup

Whether your startup business will have one employee or 50, it is a good idea to begin by creating a business plan. Depending on the size and complexity of your business, the plan can be as little as four or five pages or as long as 50 pages or more.

The act of creating a business plan alone can provide important benefits.

First, it can help you identify problem areas or risks that otherwise you might overlook and enable you to develop strategies to deal with them proactively and preemptively.

Second, it can help you address key functions in a logical, thoughtful way rather than relying on seat-of-the pants business decisions made on the spur of the moment.

Third, it can help you set goals for your business that will allow you to measure its progress and determine whether it is meeting expectations.

Fourth, it can act as a road map for starting and growing your business.

And, fifth, a well-structured business plan will be a living document that you can update and revise as your business grows and changes.

While writing a business plan may seem daunting, there are plenty of good guides available on the internet to help lead you through the process, including those at the Small Business Administration (www.sba.gov/content/templates-writing-business-plan) and at SCORE (www.score.org/downloads/Business Plan ), which provides free and confidential business advice to entrepreneurs. You can tailor these guides to suit your business, but, if you want to make the process as productive as possible, be sure to spend some time thinking seriously about the following topics before you sit down to write a business plan.

Competitive Positioning. It is important to know and understand your competition so that you can decide how you will differentiate your company from them and develop effective strategies to compete with them. Determining your company's competitive positioning, for example, as the lowest cost supplier of your product, the company with superior customer service, or the one with the highest quality product, will affect many aspects of your business, including its sales and marketing strategy, pricing, and target market.

Marketing. Sales are the lifeblood of any business and, as much as we would all like to believe that we have a product or service that is so compelling that it will sell itself, the reality is that if no one knows about it, it won't sell. Given the internet and social networking, there are more ways to market a product today than ever before.

Pricing. Pricing is one area where it is easy for startup businesses to make mistakes. Price your product or service too low and you lose out on much-needed revenue; price it too high and your sales suffer. Pricing needs to be consistent with the quality of your product or service, as well as how you plan to position it in the marketplace. Also, you need to think about how you will explain why your product is priced the way it is. For example, you might argue that "our prices are a little higher because our product has these three features no one else offers," or "our prices offer the best value because of the combination of high quality and superior customer service," or "our prices are the lowest available because of our low overhead."

Financial Projections. When thinking about your company's financial projections, initially you might want to focus on cash rather than profit, since cash is critical to getting you business started and keeping it going. Think about how much capital it will take to start your business, how much working capital it will need to operate for at least the first year, and how it will generate the cash it needs. Startup capital may come from your own cash on hand, loans or investors and while ongoing cash flow may come from these sources as well as sales.

More from this Contributor:

http://www.associatedcontent.com/article/7750636/choosing_the_right_business_structure.html?cat=3 , Choosing the Right Business Structure for Your Small Business Startup

http://www.associatedcontent.com/article/5991358/the_many_ways_a_lawyer_can_help_a_small.html?cat=3 , The Many Ways a Lawyer Can Help a Small Business

http://finance.yahoo.com/news/First-Person-5-Things-I-Wish-ac-582320536.html?x=0

First Person: 5 Things I Wish I Had Known before Starting My Small Business

http://www.associatedcontent.com/article/7779920/choosing_a_retirement_plan_for_your.html?cat=3 , Choosing a Retirement Plan for Your Small Business