RESEARCH TRIANGLE PARK, N.C. (MainStreet) -- When striving for success, it is necessary to know precisely what you want to achieve so you know where to aim your efforts. If there aren't specific, measurable goals, how can you know you're moving toward them?
When planning for success, and particularly success in business, it's important that everything be completely thought through before spending time and money. Plans should be grounded in real information and not based on how you
them to work. When planning for business success, think about the following:
The cost of not having a well-thought out and validated plan may be much more than you can afford.
You'll need to have a realistic assessment of the time and costs to achieve sustained levels of customer sales and collection of cash. At the most basic level this means determining the price of your product or service (what the customer is willing to pay, not what you want to charge), the quantity of product or service you will produce and the cost of input, including labor and payroll taxes, materials to create and deliver (if necessary), equipment (including office space and supplies), operational costs as well as marketing and sales figures.
You'll also need a substantiated amount of information on the market. Look for public information such as government reports. Specifically, look at census, labor and economic reports from federal, state, county and municipal sources.
You can also find a vast amount of usable data in public company annual reports. Publicly traded companies publish annual reports to their investors. They often contain industry, market, product, economic and geographic forecasts. Find companies that target the same customer, market or industry as you intend for your company so you can get the most use out of their data.
The Internet obviously offers a wealth of information. Look for competitive products on Amazon and other Web sites; you can find price, product reviews and more. Trade publications can also be a valuable resource. Many trade groups provide access to free or reduced-cost industry market surveys and forecasts to their member companies.
Be sure to have a realistic budget for expenses, including timeline and milestones. Estimating the cost and dividing by 12 months is not budgeting. Take time to examine your activities and resource requirements and know when the money will flow in and out based upon your operating plan. Know when you will have cash -- and when you will need cash. Be sure to have accurate cost estimates for labor, services, supplies, rent, utilities and other basic business needs. Information can be found in catalogs, vendor quotes, through online research and more.
Perhaps the most important element of a plan -- and the most difficult -- is a self-assessment of skill sets. Assessing our own abilities requires an independence and objectivity people are rarely good at or comfortable with. But you do yourself a disservice if you think you know everything you need to know. All too often people are blind to "what we don't even know we don't know."
If you want your plan to work for you, not against you, begin with the following:
- Research and read information on how to start a business and market your business, self and products, sales, and other areas in which you do not have direct experience.
- Define precisely what it is you will be selling and to whom you will sell it.
- Understand what your customer will be buying from you and why. A product, an idea, a solution to a problem, a mindset, a status symbol ... what?
- Determine how and where you will be delivering to the customer.
- Identify potential sources of workers, supplies and manufacturing and production.
- Know what equipment you need and be clear on "need" versus "nice to have" or "really want ... but don't really need."
- Budget, budget, budget!
- Validate your plan, assumptions and financial estimates
- Talk to experienced entrepreneurs, colleagues and potential customers to find out more about the marketplace and business tactics.
After you've gone through these steps, revisit every element of the plan to refine it. It is better investment of your time and money to formulate a sound business plan backed up by research and reality. The cost of not having a well-thought out and validated plan may be much more than you can afford.
>To submit a news tip, email:
Follow TheStreet.com on
and become a fan on
Lea Strickland, M.B.A., is the founder of
, a program that helps entrepreneurs turn their ideas into businesses. Strickland is the author of "Out of the Cubicle and Into Business" and "One Great Idea!" She has more than 20 years of experience in operational leadership in Fortune 500 and Global 100 companies, including Ford, Solectron and Newell.