Steps to Starting a Small Business in a Difficult Economy...Part 2

In Part 1 Steps to Starting a Small Business in a Difficult Economy I gave you 6 things to nail down before starting or buying a small business. Assuming you’ve done your homework on those 6 items (or more likely you’ve probably decided to ignore at least 4 of the 6) it’s time to move to the next phase… THE BUSINESS PLAN!

My job here is to give you the real world, not the theoretical text book version.

Here are some things to consider when putting together a business plan:

  1. The more you lie to yourself the more likely you are to fail.
  2. The business plan is for making good decisions not making good presentations.
  3. Don’t act on your business plan until it has been reviewed by and you’ve received comments from a successful small business owner. Ignore their recommendations at your own peril.
  4. Know the numbers inside and out. If you can’t recall from memory your sales, costs, working capital requirements, inventory, cash, etc, then you’ve haven’t worked on your plan long enough.
  5. Your business plan is not a tool to figure out how successful you can be, it’s tool to make sure you don’t fail.

Too many small business owners think the business plan is a necessary evil for banks and lenders. If you’re smart you’ll make your small business plan your best friend, a friend that can keep you from making dumb or careless mistakes.