How to Create A Business Plan in 6 Easy Steps

A business plan is no easy task. It is the most important document a small business owner should have and the one that most small business owners don’t have. A traditional business plan is minimally 20 pages long and can takes months to prepare. And that’s why most SBOs don’t create one.

But what if I told you that you can create a business plan in less than an hour AND in 6 easy steps? Sssshhhh don’t tell anyone.

A basic business plan should include six elements – who, what, when, where, why and how. These six elements are the actual steps to creating your business plan. I know it seems too simple right? Well let me show you.

1. Who. Simple – who do you want to serve? Determine who your ideal client is that needs your service. Are they a small business owner or not? What industry are they in? If they are a small business owner, how much income do they make? One of the BIGGEST mistakes small business owners make is that they are trying to serve everyone. But you can’t. You have to focus on one type of client and build upon it later.

2. What. What values do you promise to provide to your clients? What is your overall mission? What services will you provide? This is where you get clear on what makes you different from other companies who already provide the same service you what to offer. This is what makes you stand out.

3. When. This step is important in establishing your time management; especially if you are starting your business on a part-time basis. This is also the step where you will determine when you will launch your business. Establish how long it will take you get your new business off the ground and create a timeline.

4. Where. You’ve heard it before location, location, location. This is critical when you are operating a store front business. You want to be clear that where you are setting up shop will be an ideal location for your business. This step is also where you will set your goals for the future. Where will your business be one year from now?

5. Why. This is the most important question to answer. I am sure you have heard it before. What is your why? Your why has to be bigger than you. What is your purpose for creating this business? What are you ordained to do with your life? There has to be a greater cause than “to make money” or your business won’t succeed. This is important because your why will fuel your passion and help keep you going. Remember it’s not about you.

6. How. And lastly, how will you set all of this in motion? How will you get clients? How will you finance your business? How will this business affect your life? This is where you set the plan for how you will accomplish the other five steps. Without this step nothing will happen and your dream will remain a dream.

Do you see the trend here? Take any one of these six everyday questions, and apply them to your business idea. What other questions can you think of that can fit into this structure? You can even re-arrange the questions in any order to flow more easily for you; just be sure you answer them all. As you answer these questions and complete the six steps, you will find that you will also be answering questions that revolve around you will market your business and where, how your business will operate and how your business will be structured. These are all additional sections in a business plan that need to be addressed as well.

The Pricing Dynamics of Selling a Business

There are many tools available if you want to determine the price dynamics for selling your business. There is no particular price that you can use. The final price rests solely on the buyer and the seller. How bad does the buyer want to buy? How strongly does the seller want to sell? These questions play a domineering role towards closing any sale.

  • If you want to sell a business you can investigate and see how much a similar business is being sold. You can also contact the national trade association/s where applicable. These organizations keep valuable information about businesses in key industries and are always willing to share it with anyone interested.
  • Moreover, you could hire a Business Broker who could do all the grunt work for you and also help you broker the deal eventually when buyers begin to show up or bid to take over your business. You can sell your business based on the asset base that you have or monies that you generate including the cash flow, debt payments and revenue base.
  • Ensure that your business records are in order. Any serious buyer would want to look at your books. So it is imperative that your financial statement be in good working order. Income statements, cash flow statements, and balance sheets are what potential buyers usually ask to see.
  • You will also need to know the full estimate of your physical assets. Prepare them in a list and price them accordingly. Prospects that come around want to see a comprehensive asset list including the price of purchase and the current market value. This plays a large role in determining how much your business will go for.
  • A business that is dependent on the owner or certain employees affects price. You need to make everyone relevant in the workplace. Appoint a deputy manager and key personnel in all the departments. This delimits risk and quells fears that the company would crash if a selected few leave.

In conclusion, try to focus on the core strengths of your business. A buyer will still go ahead with a sale even if he notices certain weaknesses in a business. Buyers do not necessarily tilt towards diversified businesses. They are more concerned with assets and the strengths of a business. The pricing of a business will go up if you can improve your financial ratios and are ready to present before attempting to sell to buyers.

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