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Don't Start Your New Business Without A Business Plan

A business plan is like a blueprint for your new business and in addition to your financial assumptions it should contain all of the assumptions that you have made prior to setting out to launch your new venture. Before you start you should make sure that you have reasonable spreadsheeting skills or access to someone with those skills. It doesn't matter whether you use Microsoft Excel or a free spreadsheeting program like Open Office, it will just be difficult to complete your plan without one.


Be Realistic About Timeframes

Building a small business can be hard work and there are lots of administrative tasks that you need to plan and work on besides attracting new customers and generating income. One of the first keys to building a solid business plan is to be realistic about how long everything will take. If you decide to lease your own office then it can take weeks to simply find something and set it up. If you need to develop marketing campaigns and websites then it could be a few months before everything is finalised. Make sure that you allow for decent timeframes for both revenues and expenses.

Estimate Your Revenues

Estimating revenues for your business plan can be difficult. If you haven't worked in the industry before you could potentially survey a few target customers or you could take a look at what the competitors are doing. If you are creating a completely new industry then you may need to start with some sort of guestimate before you can actually take your product to market and see what consumers are willing to pay for it. Be conservative in the early months until you have a reasonably good idea of market conditions.

Identify Your Costs

Identifying costs for your new business should be easier than estimating revenues. Look at a template for a profit and loss statement and then think about each line item and whether these particular items could impact on you. If you have decided to employ staff then you can check out employment sites like Seek.com.au to estimate what you need to pay each person. Do not forget to account for your oncosts like payroll tax, workers compensation, annual leave plus superannuation and long service leave. Make sure to have a buffer for contingencies.

Don't Forget Your Capex and Cashflow

You will need to determine what sort of capital costs are involved. Will you be needing capital equipment or vehicles for the business? Will you require office space or warehouse space? These are all questions that you will need to answer before building your business plan. Once you have the answers to these questions you should work out how you intend to fund your new venture. With capital equipment and vehicles you may opt for a finance lease whilst for the general setup costs of the business you may choose bank finance or external investors.

Don't Be Afraid To Ask For Help

If you have never created a business plan before then it can often be quite a daunting task. Don't be afraid to get some help from a local accountant or financial planner in terms of digging out some of the information that you need or in terms of putting together the spreadsheet. Remember, a well written business plan should not just be the figures but should also be a detailed account of all of your assumptions in launching your business. Your business plan is also a really useful tool to have for the future and will be a necessity if you need to raise bank finance for your new venture.

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