When I started my advertising business in the 1980’s, I didn’t know about business plans – and it cost me. Since that time I’ve discovered the extraordinary monetary and personal value of writing down your plans and goals. Here are the five questions I ask myself when drafting a business plan.
What are my costs? Go through every potential cost and include proper staffing and management. In small business, people tend to wear many hats, but you must be properly staffed to effectively serve customers.
What is my budget? Work out how long it will take to make a sale. What’s the stage process from contact to contract?
Am I properly capitalized? Many people start out under capitalized and this causes tax issues down the road. Make sure you have enough to pay your employees and your other financial obligations.
What will it take to scale? Your future planning starts now. Know what it will take to grow your business – staff, cash, bigger building, etc.
What legal work do I need? Contracts must be supervised by lawyers, and that costs money. A business plan helps put into focus what legal contracts need to be engendered to include legal exposure and liability.
Asking yourself these simple questions can help you avoid big monetary losses. Review and adjust your plan at least twice a year to keep up with business growth and economic changes. With a good plan in place, you have a solid road map for future success.