If you decide to start your own business, you will need an idea, a plan, and financial backing.
Your business is unlikely to succeed without all three, and while most people who go into business start with an idea, most businesses that fail do so because they were undertaken without enough financing to sustain them through the period of becoming established.
A solid business plan can tie the idea and the financing together to create a successful business.
A business plan is a blueprint for your company. It takes your business concept and turns it into a workable entity.
The business plan will include a description of your business and the market for your product, identify your competition, describe your business structure, and outline your organization and personnel.
It will include historical financial information, if any, project sales, expenses and cash flow for three years; outline your marketing strategy, staffing and equipment needs; and identify the source and amount of funding you expect, the application of that funding, and a break-even analysis.
You must arrange for adequate financing before you begin your new venture or you will surely fail. There are many ways of financing a business.
You can use personal savings; borrow money from friends, family, or a financial institution; or take in a business partner to whom you give a share of the company in return for an investment in it.
Your business plan will be a valuable tool when you seek capital funding, and it will also guide you as your business progresses. Revise your plan regularly as your business grows and develops, so you always have a good idea of where you intend to be going.
Remember that entrepreneurs do not have anyone they can depend on for a regular paycheck. They must not only have faith in their undertaking, but also the character and financial resourcefulness to smooth out the bumps of an irregular income.
A successful entrepreneur must have the discipline to save when the money comes in so that there will be funds available when it does not.