August 25, 2010
One of the most important things when starting out your business is to have a business plan. A business plan or business model outlines exactly what your business plans to do, how much it will cost and what your projected revenues are. Without first creating a business plan you can find that you're running off in all sorts of tangents and costs are out of control while there's no discernible revenues.
Business plans help you identify and formally write down exactly what you plan on selling. Then you can do your best to outline all the expenditures which your business goals will require. Budgeting is very important as it can be a useful guideline to control costs. By having a plan you won't go out of the way spending money on ideas which may not bear fruit.
It's extremely important to determine how you will be generating revenues from your business and set a time frame. If you have some notion that in the distant future your business will generate revenues then that day might never come. Quantify and plan the dates by which you can set revenue targets for your small business.
Investors and debtors will ask you for a business plan. More importantly, you will need a business plan for your own needs so you can set realistic targets and hope to succeed. Blind faith in a business idea seldom leads to success.