If you've just launched a small business—or you're about to—you have high hopes. That's understandable. But you also need to understand that many new businesses fail. In fact, according to Forbes, most new businesses don't succeed for more than 2 years, but yours can beat the odds if you have a smart business plan and get the help you need.
Why Do So Many New Businesses Fail?
The reasons many startup businesses barely get off the launching pad are several. For some, it's a lack of product/market fit (in other words, consumers aren't interested in what you have to sell, or someone else sells your products for less money). For others, it's a lack of cash flow—but whatever the specific reason, what all these failed companies have in common is poor planning. That's unfortunate, because there's a proven strategy to create a smart plan for your new business, one that's been endorsed by the U.S. Small Business Administration (SBA).
How Do You Create a Business Plan?
Every business is different, and no set of planning protocols applies to every new company. That said, there are several components which are common to every new business plan, so whether you are just getting started or you are looking to refocus your business in the New Year you will want to consider the following:
- Executive summary: the executive summary outlines your principal business goals and helps potential investors understand the reasons your business will succeed. It should point to the market analysis you've completed and demonstrate that consumers want the products or services you plan to offer. Finally, the summary should describe your company's unique selling proposition (USP), which explains how your business is distinct from other, similar businesses.
- Market analysis: your business won't succeed if you don't take stock of your chief competitors, current industry trends and growth potential. These facts should be included in the market analysis. Include an analysis of your pricing structure (vis-à-vis your major competitors), a thorough competitor analysis, and a description of your strengths and weaknesses.
- Organizational structure: this should include an organizational chart with detailed profiles of the key members of your management team, along with their qualifications and professional backgrounds. You (and those you hope will invest in your business) need to understand who's responsible for what in running your business. You also need to explain the legal structure of your new business (for example, will you incorporate the business, is it a partnership, and what is the ownership structure?).
- What you sell: are you offering products, services or both? How will your products and/or services appeal to consumers, and how are they better than similar products offered by your competitors? Finally, are any of your products still in the development stage, and are there important patents or copyrights associated with them?
- Your marketing plan: you can have great products and services, but if you don't have a solid plan to put them in front of consumers, your business will probably fail. In this section of your business plan, you need to describe (in detail) what your comprehensive marketing strategy will be. Will you utilize inbound marketing, outbound marketing or both? Will you have a website, and, if so, how will you drive internet traffic to your site? How will you acquire new leads, how will you nurture those leads through the buying cycle, and how will you close sales?
- Financial statements: you need to demonstrate that you'll have sufficient cash flow to keep your business thriving over the long haul. Will you be seeking investor funding? If you will, how will you obtain it? Are you planning to secure a business loan and, if so, from what entity? If your new business is already up and running, be sure to include critical historical data in the form of balance sheets, cash flow statements and income statements.
You wouldn't make any important decision without a solid plan, whether it's buying a new home, getting married or driving across the country. With sound planning, you can anticipate potential problems before they arise—and ensure you'll know how to deal with them should they occur.
Simply stated, a solid business plan will dramatically improve the odds that your business will succeed. So will a smart marketing plan. To learn more about the ways our email and other marketing services can help you increase sales and grow your new business, contact us today.
How Can Act! Help?
Act! helps business owners manage customer information, track performance, and plan for the future. Combined with dozens of integration options, from Outlook, to Dropbox to Facebook, Act! is built to be the center of your business’s world. Making it easier to do business instead of just managing it.