Before jumping in to the actual writing of your business plan, it is important to answer some key questions which will better shape your work. Consider these five areas before you begin drafting.
While “every resident within a fifteen mile radius” is a customer target group, it may be a difficult group to market to. It is easier to find methods of reaching specific customer groups which share common needs, behaviors or demographics. Look for these niches, even if you decide upon three or four to begin with.
You must have researched and documented information about the industry you will be competing within. Look at current and future trends affecting the industry in order to better design your own company. Also look at the best practices of companies in the industry and consider how you can emulate these to share as many of the same efficiencies with existing competitors as you can.
The industry background should also give you some understanding of the key operations systems for a business in your industry. These may be software-driven systems (such as POS, accounting, inventory or scheduling) or people-driven systems (such as training, hiring or sales).
From the basic understanding of the type of growth and profitability you can expect, you should be able to determine what type of funding your company is a candidate for. This could be bank loans, angel investment, or small investments from friends and family, for example. The amount of cash needed to cover start up costs will also make a difference here, as venture capitalists, for example, generally focus only on companies requiring hundreds of millions of dollars of funding or more.
Before drafting a business plan you should have a preliminary discussion with a lawyer familiar with launching similar businesses in your area. This talk should cover the licensing and legal requirements you will face, as well as the most advantageous legal structure for the company to take both based on the short term and longer term needs, taxes and legal liability.