In the delicate interest of preserving life, liberty, and the pursuit of happiness… Let it be done, that…before launching your independent business, you create a business plan. For the uninitiated, a business plan is a living document that generally projects 3-5 years into the future and outlines the route you intend to take to grow revenues and achieve stability and success.
This document is important to create, keep, and continually modify before any other steps are taken for two reasons: it will help YOU stay informed, organized and focused, as well as being a source of credibility when/if investors approach you to finance you and your company.
Whether you’re an actor, a wedding planner, a lawyer, a salesman, or any combination of logic-based, tactical skill-based, creative, labor-heavy, or emotion-centered work, you can transform your skills into independent businesses and the first step to doing that successfully is mapping out your strategy before taking action and spending money.
“An investment in organization is an investment in yourself…”
Select the headings you’ll need, research and fill them in, and discard the categories unneeded:
- Cover Page – A clean white sheet with your logo, company name, and contact info on the bottom.
- Table of Contents – A list of what the reader can expect to find within the following pages.
- Executive Summary – A summation of your business as a whole, succinctly defining goals.
- Company Overview – Descriptive information on what you do and how you do it differently.
- Target Market/Market Analysis – Research on your industry, market, and competitors.
- Organization & Management – Explains how your business is structured operationally.
- Service or Product Line – What you sell, how it benefits customers, and its lifecycle.
- Marketing & Sales – How you will market your business and what your sales strategy is.
- Financial Projections/ROI – Include here whatever information you need to show projections.
- Dispersement of Profit – Not all businesses will need this, but this lays out how everyone is paid.
- Funding Request – If attracting investors, explain here exactly how much you need and what for.
- Appendix – Optional. If used, include additional information like resumes, permits, leases, & legal.
For those ready to consider selecting a tax structure… When beginning a business you must decide what form of legal entity to establish. How will your company be taxed? How will it be run and managed? Deciding this will determine how and how much you pay in taxes, the amount of paperwork your business is required to do, the personal liability you face, and your ability to raise capital.
These are the most common forms of business structure…
- Sole Proprietorship – You alone own the company and are responsible for its assets and liabilities.
- General Partnership – There are different types of partnerships, arrangements & division of responsibility. Each partner is personally and equally liable for debts of the partnership.
- Corporation – More complex and suggested for a larger company with multiple employees. Corp has certain rights, privileges, and liabilities beyond those of an individual.
- S-Corporation – Similar to a corporation except you are taxed on a personal level.
- Limited Liability Corporation (LLC) – Provides limited liability features of a corporation, tax efficiencies and operational flexibility of a partnership.
- Limited Liability Partnership (LLP) – Similar to the general partnership except that normally one partner doesn’t have a personal liability for the negligence of another partner.
Adding value to your company by sharpening your mind while breaking down empire-building into digestible steps, creating a business plan is like crafting your own special field guide that you’ll turn to when you need perspective and guidance on your entrepreneurial path.