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Whether you are looking to run a small one-person outfit or end up as the next Bill Gates, the starting point should be a good, clear business plan. However, this shouldn't be a complicated document to develop. In fact, you should be able to do it in your lunch hour by thinking about a series of questions:

* What is my product?
* Who will buy my product?
* How will I promote my product?

* What price should I charge for my product?
* What are the financial issues?

Let's look at it step by step:

What Is My Product?

In other words, what are you going to sell to people? It may be a tangible product, like in-house lunches for local businesses or plants for the garden. It may be a service, like giving driving lessons or cleaning houses. You need to start with a clear idea of the products or services that you are going to provide.

Who Will Buy My Product?

Who are the people that need your product or service? Are you selling to other businesses or to the general public? Will you go to them, or will they come to you? This is important, since it helps determine the sort of premises that you need for running the business.

How Will I Promote My Product?

This is very important. If you don't promote your product or service, no-one will know about it and you will have no customers. The answer to the second question is critical here. Once you know who your customers are and where to find them, you can plan your promotional campaigns. These can be a simple as word-of-mouth networking or as complex as a full marketing campaigns with advertisements and give-aways.

What Price Should I Charge For My Product?

You need a clear view of the appropriate price for your product or service. If it is too high, people won't be willing to pay. If it's too low, people may be suspicious of the quality and go elsewhere. Have a look at what the competition is doing and decide on the right level to pitch it at.

What Are The Financial Issues?

Once you have a clear view of what you are going to sell, to whom, how and at what price, you can then do the sums and see whether it's going to work or not. Make a sensible estimate of expected sales over the first year, remembering that it might be slow to start with. It's better to be pessimistic at this point. If you underestimate, it's not a problem. If you overestimate, you could get into difficulties. Then estimate the costs that you need to spend in order to support that level of sales. Remember to consider direct costs like materials and labor plus indirects like electricity, postage and Internet costs. Compare the money coming in with money going out. Is there likely to be a surplus or will you need to make up a shortfall to start with? If so, identify sources of finance, whether it's selling the car, borrowing from friends or relatives or going to the bank for a loan. If you have to do the latter, having a clear business plan will greatly increase your chances of getting the money that you need.

Your business plan should be a road map for your business. You probably won't have to look at it too often once you get started and know where you are going. But it's a great planning tool when you start out. It can also be useful to revisit it every year to see whether your predictions were correct and to check whether your objectives are still the same as before or whether you need to change direction.

Conclusion

Preparing a business plan is a simple process that can be done easily in a short space of time, such as over lunch. However, it is an important first step in getting your business started. It could be the most important lunch hour of your life.

Learn more about this author, Elizabeth Ducie.
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