Importance of Business Planning
|December 11, 2013||Posted by bella under Business|
Before starting 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 was not, of course there is no point in devoting your energy, thoughts, and even money for the business.
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 to make financial planning. How much capital do you need? To be able to answer this question, seek information as possible about anything else you need to start a business. It is helpful if you know someone who has been engaged in similar efforts. Next, you need to estimate the costs that need to be spent for the things you have listed above. Be careful in this stage so that no one missed. Knowing the amount of capital you need is very important to estimate how much time you need to return on investment (break even).
Next, perform the calculation of operating costs that will be required. 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 gain. What price will the product or service you offer? Do a survey in advance 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. Mistakes many people in this stage is that they make assumptions that are too optimistic that they will lose heart when he found the fact to the contrary in the field.
From all the above calculations, you will be able to estimate how long it takes for a turnover and achieve profitability. At this point you can see if the business has good prospect or not. If the prospect is good, you can continue to run the business. But if not, you should quit and seek other business opportunities.
With a good business plan, you will be able to avoid things that are not desired. You will be able to focus your energy on the business side which is promising.