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Page 3 of 3 4. Money matters most
To an entrepreneur, money's not funny – either he doesn't have it or he doesn't have enough of it – unless he's the son of Warren Buffet, or something like that. Here are some typical financial hiccups in an entrepreneur's early life:
- He needs seed capital to begin his business.
- He needs working capital to sustain his business until it breaks even.
- More often than not, he is short of capital – so he approaches a financial institution for money, which scrutinizes his business plan. When they're doing that, he can only hope his plan passes muster, unless he's 100% sure of his plan.
- After he gets his money, he has to walk his talk and prove to himself, his stakeholders, his employees and his lenders that his product is indeed profitable.
So every entrepreneur has to prepare a detailed financial report – one part of this report talks about how he plans to raise the initial capital, how he will deploy it, and how will investors/lenders get their capital back. The second part of the report will carry profitability projections.
5. Marketing strategies
The marketing plan is another component of the business start-up planning process. The entrepreneur has to identify his market, target it, test it and figure out the best ways of leveraging his marketing strategies in order to maximize returns. This report makes the final part of the business plan.
These were the various components that you need to strategize while planning a business start-up.
In conclusion, you need to make various reports – a report that lends character to your business, a report that discusses and analyzes your customers and competitors, a report that shows your plan of capital flows and, finally, a report that lays down your marketing strategies. Once all the reports are in, they must collectively make good financial sense. If they don't, your business won't work; if they do, you're on a winning streak. Good luck!
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