The importance of business planning
|July 9, 2013||Posted by bella under Business|
Before embarking on your side business, it is important to have a good business plan. Why? Because you need to know whether a business opportunity that you seek it is indeed the potential to provide benefits or not. If it does not, of course there is no point in devoting your energy, thoughts, and even money for the effort.
In addition, business planning is also important to help you identify the various aspects of the business. Are there certain things that you did not anticipate? Is there a problem that previously did not you know? Good planning can help you to overcome all this.
First of all you need to do is make financial planning. How much capital do you need? To be able to answer these questions, seek information as possible about anything else you need to start a business. It would be very helpful if you know someone who already runs a similar business. Next, you need to estimate the expenses that need to be spent for the things you have listed above. Be careful in this stage so that nothing is overlooked. Knowing the amount of capital you need is very important to estimate how much time you need to return on investment (break even).
Next, do the calculation of operating costs that will be needed. How many employees will you hire? How about their salaries? Then the raw materials if you need to make your product? What about the cost to rent a place of business?
After completing the calculation of capital and operating costs, you need to calculate an estimate of income you will earn. What is the price of products or services will you offer? Do the first survey of similar products or services that you have the proper estimate. Next, estimate the number of sales roughly you can accomplish. At this stage you should be careful not to be too optimistic. Mistake many people in this stage is that they make assumptions that are too optimistic that they will get discouraged when he found the opposite true in the field.
Of all the above calculations, you will be able to estimate how long it takes to return on investment and achieve profitability. At this point you can see if the business has a good prospect or not. When prospects are good, you can continue to run the business. But if not, you should stop and seek other business opportunities.
With a good business plan, you will be able to avoid the things that are not desirable. You will be able to focus your energy on the business side is promising.