Starting a new company is both exciting and stressful. Numerous decisions require attention. Without a plan in place, hasty decisions early on could lead to mistakes that put the company at risk. Something that may help streamline the process, provide guidance and give others – such as potential investors – crucial information about the new company is a business plan.
This written document outlines the objectives, description, financial forecast and market of the business. It shows that an entrepreneur is organized, focused, and has a plan – not just an idea. When looking for financing to start up your business, it provides an easy place for a potential investor or banker to go in order to better understand the business.
Plan for yourself
Your business plan can help you organize all of the moving pieces of your new business and set yourself up for success during the formation phase. Skipping this step can be hard to bounce back from, if you make a critical error that you could have planned for and avoided.
Your business plan should map out your team – who you’ll need from the start, and who you can add further down the road. Create an organizational chart of your business, and figure out what each member will do and what skills they’ll need to possess.
You’ll also want to figure out ahead of time what all will be required to make your business run. Your plan should include everything necessary for operations – from suppliers to facility requirements to inventory control.
Plan for investors
This is an opportunity to show financing institutions that you understand the market and the competition, and you have a plan to succeed within this environment. Therefore, it’s important to demonstrate that you’ve considered the business from all angles.
Define the business opportunity. What is the trajectory of the industry as a whole? How is your service unique? What advantages will your company have over competitors?
Financial institutions will also be concerned with your plan to generate a profit. What will be your marketing and sales strategies? What will be the cost of your daily operations? How much capital will you need to get started? What are your forecasted losses, profits and sales in the initial months and years of your business?
How to get started
It’s important to really think through all of the ins and outs of your business and come up with a comprehensive plan that covers every aspect of how your business will run. Do your research so that you can support any claims and forecasts.
Entrepreneurs who are new to the business world may need guidance and assistance in developing a business plan, along with the other aspects of the business formation process. Simply putting ideas down on paper is not enough. The plan needs to be structured in a way that presents the information in an easy-to-use manner for both those within and without the company.
For these and other reasons, consulting with a lawyer experienced in the formation of Ontario businesses could prove useful.