Creating a business plan as a small business entrepreneur is the last thing you want to think about. However, planning can give your business the chance to step ahead of the national average. It's a sobering thought that the rate of small business failure for 2007 was pegged at one third failing in two years and two thirds in seven years. Most of those that failed had no business plans.
With a business plan you can look at all the costs of starting a business from equipment to advance marketing, legal and insurance costs and rent. When you use real projections of cash revenues and payments you will know the cash reserves. This way you prevent raising too little capital which can be devastating for any new business.
Small business owners donít study the competition around them. They enter the business unaware of how they compare to competitors. They over-think the needs of customers. They ignore essential industry costs and revenue drivers that can be a block in the market. Many businesses have been run at a level face which increases the pressure from the internet brands along with national chains. Local companies need a plan to compete with local and national companies for the consumerís money.
A business plan is thought of as a document given to a stranger like banks, loan officers and investors. The small business entrepreneurs like to share their plans with people that could become partners. Remember that good partners will see your talents and your forethought in the plan. They will bring something other than money, whether legal or insurance help, management help, marketing knowledge or contacts with vendors and customers. With the right partner your plan should grow stronger.