Business Action Group

The business plan is an important tool before you want to start any business idea.

The other day a reader sent me an email with a query which I think clearly detail but generally ignore my advice on a particular business idea I had about a candy business.

From your question it was clear both that the investment he wanted to do was imminent, but it also had not conducted any business plan.

Not having a business plan had not been able to sort your ideas and apparently had escaped critical issues and factors regarding your new business.

The most important is that he had done an analysis as to what was the best opportunity to launch its candy business. The country you live in our dear reader is in the Southern Hemisphere and is therefore by early spring, the heat is going to increase and obviously was not the best time to launch a business of candy.

The business of candy for their high caloric content is a seasonal business whose sales are down in the warmer months. To our dear reader that had eluded him in his enthusiasm crucial to realize their business idea.

When you make a business plan, it allows you to put in black and white and think about every aspect surrounding a new business idea to make a more careful analysis of the profitability of the idea and all the factors that can make failure to correct or prevent them.

Of course to do a business plan is no guarantee of success but the chances of failure are reduced to to see in perspective the idea to run with planning at least a year for what will happen to the business.

Several times I received emails about where to find information about making a business plan and certainly you can find a number of free resources online about this, but the best advice I can give is that whatever information you can find what you should do at least as a projection of income and expenditure in the business for a year.

Calculate just how much to spend and how much to sell by a projection from month to month. Then think about how these revenues may be affected and those expenses each month (if your friend had done this reader would have thought about what happened with the candy in the summer months and if the business fluctuated seasonally).

After making that projection by at least one year. Start thinking how you can validate as accurately as possible that the projected revenues are real or if it has gone from optimistic or pessimistic. For example go to similar businesses that intend to do and try to find out how are sales of that business, if you do not want to give an analysis of information by observing customers in and out of that business and see how much they are buying.

If you can do surveys about their new product, and think you can be sure that your projected income and expenses of its new business idea is valid.

Exhausted can be a chore but is best done before you spend money on a project that may be flawed simply because they have not been to think realistically about its implementation.

The expenditure see your marketing plan and how much to spend on advertising your business. In other words proyéctese everything that can happen to your business idea by the following year. Will competition affect the projected numbers?

Having never going to be safe, then validate the figures, proceed to project them into three scenarios, an optimism, pessimism and a realistic one and think you will do if given the pessimistic scenario. Think and plan what would happen in this pessimistic scenario and how long you can hold and what will be your exit strategy in case it fails.

I am convinced that a business idea can never fail if well planned and executed, and therefore needs a business plan that allows you to test everything that can happen to your business idea.