Water your plants: operations hydrate your startup
Operations in a startup begin with the composition of a business plan. A new venture without a business plan is like a car without an engine; it exists but cannot get anywhere. In fact, researching and drafting the new venture’s business plan is probably the most important and necessary business practice you will ever under take. Business plans are usually written to obtain financing for a new venture. However, the business document and planning process provides a much more important function. This document will be your road map for getting your venture started. The findings of your research contained in your business plan can tell you from the beginning with pretty good certainty if your new business has a real chance of being successful financially and sustainable in the long run.
Traditional sections contained in a business plan:
- Company Description gives a background to the history of your startup and explains what your venture will do.
- Statement of Mission or Mantra is a short phrase that explains the purpose of your new venture.
- Products and or Services describe what you plan to sell.
- Target Markets elaborate on whom you plan to sell to.
- Marketing Strategy explains what unique maneuvers your venture will under-take to accomplish the businesses goals.
- Competitive Analysis documents who your main competitors are in the market place.
- Management Teams are the names, titles and backgrounds of the people who will lead your venture to success.
- Operations for Investors explains what tactics you will undertake to finance the venture and the exit strategy you plan to utilize for the initial investors to make a profit on their investment.
- Financials document the forecasted sales and expenses for the first five years of the new venture. The financials should be accompanied by a detailed assumption log which summarizes where the numbers entered in your financial spreadsheets originally came from. Most investors want to see your financial documents include balance sheets, cash flows, income statements and key ratios such is when you anticipate breaking even.
- Long-term Goals explain what you hope to eventually accomplish with the new venture.
- Executive Summary which goes at the beginning of your business plan but is often written last should contain a brief summary of each of the above mentioned business plan sections. Executive summaries should be limited to two or less pages. The Executive Summary is often the most read portion of your business plan so it’s important to write and re-write this section until it’s absolutely perfect. Some entrepreneurs recommend that you draft the executive summary first and use this document as a planning document to cross check what you need in order to complete the business plan.
After you have completed drafting your new venture’s business plan it may be time to establish the legal entity of your business. Check with your local government office to get directed to the rules and regulations and processes you need to follow in order to properly establish your business’s legal entity
Some of the most universal company establishments are:
- sole proprietor
- private limited company
- state-owned enterprise
- public-limited company
If you can get the resources from family and friends to pay for an attorney to help you establish your business legal entity you may lessen some of the risks associated with starting a new venture. The type of business entity you form will more than likely impact the way in which you pay taxes on your products and services and file your country’s income tax filing. The definitions for the different forms of company establishments vary from country to country. You will want to check with the portion of your government that grants company established entities for clarification
With a draft business plan in hand and your legal company business entity established it’s time to fully map out the operations/processes you plan to utilize to implement your business plan. It’s highly recommend that you make a Gantt chart to stay organized with the correct sequence and timing of each business activity.
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