The reading level for this article is All Levels
As we’ve mentioned before, the process of creating a business plan helps you work through the future of your business before it happens. You’ll uncover challenges and determine ways to overcome them, creating a road map for your business. If there are roadblocks up ahead, now’s the time to find out. Let’s look at some key sections and identify where you should pay particular attention.
In the Company Description, you visited some key areas. Your Industry Summary in “Context” gives you a snapshot of how your business fits into your industry. Pay particular attention to the industry’s growth potential and forecasts. Is there room for a new player?
Jump forward to the Industry Analysis section to closely examine what factors affect growth and decline, and what entry barriers you might face. What about future competition? In emerging industries, you could plan ahead to be a major player, or fail to plan and be one of those left behind as things shake out.
Back to the Company Description. Under the Business Profile, you’ve outlined the specific factors which influence your business, including local economic factors, labor force, seasonality, and your dependence on special suppliers or vendors. While these will ideally show why there’s strong potential for your business, they may also alert you to imminent hazards. Is the labor force sufficient for your needs? How will seasonality of the business affect cash flow? Take a close look at these questions, and plan ahead for obstacles.
The “Challenges and Solutions” section of your Company Description is precisely that. What strengths or advantages do your Competitors have? Marc Gingras discovered that an established foreign competitor could undercut his price substantially, making one of his entrepreneurial dreams a potential nightmare. Pay close attention to things that could leave you Vulnerable, including product obsolescence, market cycles, and economic downturn potential, as well as Legal Factors, such as restrictions and regulations that can hold you back, or future changes in laws or policies which could hamper your business.
We’ll help you identify more key markers in the next lesson.
The Small Business Funding Center grants permission to reproduce this article in its entirety only, with credit given to the Small Business Funding Center at www.grants-loans.org.
For information on grants & loans for your new or existing business call 1-800-658-9792 . Or write us at Small Business Funding Centre 1500 Bank Street, Room 425, Ottawa Canada K1H 1B8 or e-mail us.