Choosing to dive into the world of entrepreneurship is a big decision. Like all decisions, you probably have a good idea of the type of business you want to start and how you would run your own business. But it is still a good practice to formulate a business plan to guide the execution of your idea. A well developed plan will assist you in obtaining a bank loan, or the interest of potential business partners and suppliers.
I want to become…
- “I’m good at plumbing and have worked with composite materials, but boating is my passion. Maybe I could start a boat repair shop!”
- “I’ve been a welder at a factory, but cars are my passion. Maybe I could start my own muffler shop!”
- There are resources available to help you convert your existing skills to a new entrepreneurship career.
Starting your own business doesn’t always mean quitting your day-job. If you have a hobby that pays for itself, it could eventually grow into a career. Just make sure you first obtain an outside employment waiver from your current employer!
Accept that you need to put your idea down on paper, there’s no getting around this step. It’s a must before seeking commercial or public financing! Your business plan should be clear and interesting. (Generally, the more detail you include, the clearer it should be.)
A business plan is ‘your idea reduced to numbers’. Estimate your revenue, costs, and profit in a best-case, most-likely, and worst-case scenario!
There are sources that you can pay to write your plan but remember you’re the one opening and running this business. You should commit to preparing the plan and it will help when you sit down with a banker to review your loan application.
Overall, your plan should answer these questions:
- What is the business idea? (in plain language, describe how you will make money)
- what product or service you will be selling? (be specific)
- How will you price your products? (15% more than purchase price? 10% less than your competitors?)
- Who will be buying the product or service? (what does your market research show?)
- What are your advantages compared with local competitors? disadvantages?
- Who are your biggest local competitors and/or are there substitutes to your product?
- Who will own the company (sole proprietorship, partnership)?
- What skills and workforce will be needed and where do they come from?
- How will you market to customers? (how will they find out about your product? will they be convinced to buy?)
- Logistically, what is your supply chain? (where do goods come from? how does it get delivered to you, to the customer?)
- What resources will you need? real estate? cash? vehicles? conditions? (ex: weather)
- How do you project your numbers will look during your first three years? (cash levels, revenue, costs, profit margins)
- Who does what when? (roles and responsibilities for getting started as well as day-to-day operations)
While you are writing your plan, help is available from the Small Business Development Center (SBDC), as well as planning with the U.S. Small Business Administration and find a mentor at SCORE.org. There are also printable guides available for download from Incorporate.com.
In most cases, the only person reading your business plan is you, any business partners, and your banker! As long as its clean and professional, don’t worry about appearance or marketing. Salesmanship and flowery language won’t help you here, this is by you, for you.
I just wish I knew more about business.
You don’t need a degree in business to start one, but the Commonwealth of Virginia has put together a beginner’s course in starting and running a business. The U.S. Small Business Administration also has a beginner’s course. You can learn the nuts and bolts of owning a business right at home in your spare time.
Or, you can attend one of many Workshops and events offered by the Small Business Development Center (SBDC) or seminars offered from VAStartup.org Growing America Through Entrepreneurship (GATE) has Business services and Community Resources scheduled all over the commonwealth.
Just because your skills come from one industry does not mean they don’t transfer to other business ideas. Always be thinking about how your knowledge can be applied elsewhere.
Innovation and change often come when a “regular Joe” gets frustrated with what they know could be done better. Is entrepreneurship for you? A printed guide is available to doing business in Virginia.
No company starts out big. All are grown from a vision someone had, and all were painstakingly managed from that humble beginning. There is a network of 30+ business incubators in Virginia that can help with direct operating costs. Even if you have only a few minutes, you can learn a lot from people who have been there.