Many would-be entrepreneurs have heard about the importance of writing a business plan but dread the prospect of actually having to create one. It’s worth the effort, though: as Mike McKeever observes in How to Write a Business Plan (14th ed., 2019), “Almost without exception, each business owner with a plan is pleased she has one, and each owner without a plan wishes he had written one.” Fortunately, there are plenty of resources available to help you develop a convincing plan.
It’s the rare business owner who has the means to set up shop without any financial assistance. For this reason alone, having a business plan is desirable, because potential lenders (whether financial institutions or individual investors) will not take seriously anyone who approaches them with nothing more than a vague, loosely defined business concept. Coming up with a detailed plan also allows you to see in advance if your concept is truly sound before you waste a lot of time and effort on an impractical venture.
Creating a plan involves research into topics like fixed costs (rent, utilities, insurance, loan payments, etc.) and pricing. Another important but often overlooked step in the data-gathering process is conducting market research, which can tell you how much demand may exist for the product or service you anticipate offering, and how many competitors are already offering the same product or service in the geographic area where you plan to do business.
To learn about the potential market for your business, you’ll need demographic information about your location, much of which can be gathered from the Census Bureau website (www.census.gov). Online business tools available from Richland Library are also good sources for market research. The Data Axle Reference Solutions database is a business directory that also provides demographic information, including consumer interest levels in various products and services. (Call 803-929-3401 for help with this and other library-provided resources.)
Once you’ve done your research, you’ll want to see what a typical business plan looks like before drafting one. The Small Business Administration website (www.sba.gov) offers tips on structuring a plan as well as samples of complete plans. The Business Plans Handbook database (available to Richland Library cardholders) contains hundreds of actual business plans for a variety of business types that can provide guidelines for the structure and content of your own plan.
It’s also important to seek out feedback from experts once you have a business plan in hand. South Carolina Small Business Development Centers and SCORE (Service Corps of Retired Executives), both of which have offices throughout the state, are staffed by mentors with a past of successful business ownership who offer counseling on business plans and related topics. In the Columbia area, you can contact the local SCSBDC office at 803-777-5118 and Midlands SCORE at 803-545-3826 to schedule a free consultation.
The statistics on business success can be pretty sobering. US Bureau of Labor Statistics data indicate that 20% of new businesses fail within the first year. This percentage rises year after year until, ten years out, only about 30% of businesses founded at the beginning of that period are still operating. A solid business plan that incorporates market research can help you determine whether your business is likely to end up among that 30% of long-term survivors.