Starting up a business requires organization and part of that organization should include a business plan. While it can be hard to predict how your business will fare in its debut year, you can at least mitigate some risks you will be exposed to. The best way to dodge these is to write out a business plan that devises a strategy for the year and anticipates what sort of failures you could some up against as a company.

Set a plan objective

While many business plan objectives can be easily summarized as ‘make a big return during the year,’ it is far more helpful to create an executive summary. For example, if this is your first year of trading, then this summary will need to be able to adequately describe how you want to grow as a company and who your founding members are. This will be interesting to reflect on in your following years as a business, as it might be an illuminating landmark to look back on and see how you have developed.

Is a loan needed?

The reality of starting up a business is that it will take some investment. Therefore, a loan is sometimes needed to cover those costs. This can feel a bit dicey, as a new business owner, as you may be wondering if your first year’s worth of profits will be enough to pay it back. This is why some financial research and advice is necessary. If you do need a loan, be sure to:

• • Choose from a reputable provider with a love interest rate
• • Pay it back over the minimum requirement
• • Choose one that is not too large and beyond your means of paying it back

A business loan is, by its nature, a risky investment, and so it is of paramount importance that you play it safe when it comes to taking one out.

A mission statement

What is your business and what do you stand for? It’s not enough to simply say, ‘we create software’ – software for who? A mission statement should be able to succinctly summarize what you have to offer the general public or potential clients. A customer should not read your mission statement and still wonder what it is you exactly offer. It helps if the tone of your company matches your values, too. For example, if you wanted to create software that is accessible to children and young students, then your copywriting should be warm and informative, not strict and abrupt.

Cash flow

Your cash flow is one of the most important ways of keeping track of how well your business is performing throughout the year. Monitoring what comes in and how it is spent will determine how much of a loss or gain you are making as an entity. For example, your internal rate of return (IRR) should be used to estimate how profitable some ventures will be. These estimates can be used in your cash flow to determine how much of a budget you have for certain business ventures. An IRR calculator will help you to total up this amount and make some adjustments.

Market and competitor research

This is an important one for staying savvy: understand the broader market and who poses the biggest threat in terms of competition. Getting a sense of what everyone else is doing in your sector will help you to find your own little niche and offer a service that is truly different. Your biggest rivals should show you how success is achieved, but also how you can offer something unique and that side-steps what they have to offer.

Day-to-day organization

How your business functions will be in part down to the management structure of your company. If you are a start-up company, now is a better time than ever to decide who should hold the responsibility of managing teams and the functionality of your business. The logistics of how you organize yourself as a company should feature in your business plan as a sort of blueprint.

Business plans aren’t just a ‘to-do’ list for the operations of your company. Rather, it helps you to keep on track of your progression and make use of industry research. It will also hold vital financial information, that tells you how much of a profit or loss you are projected to make, which will also have an influence on how you decide to operate. By combining research with strategy, you can give your business the best possible fighting chance in the industry.