By Chris Abbott, Assistant Vice President, Business Banker
Starting a new business can be exciting and—understandably—a bit daunting at the same time. There are several important steps (such as registering your business with the State, gathering a tax ID, and filing to become an LLC or a Corporation) which are critical to the process. However, before you launch into those key start-up ‘to do’ items, we always recommend that entrepreneurs begin by formulating a solid business plan.
While developing your business plan, you’ll better understand your objectives and strategies, and how your unique offering fits into the marketplace. Plus, you’ll be in a stronger position to assess the feasibility of your idea before you begin investing time and money into it.
Here are three key things to focus on when building out a business plan:
- Answer critical questions. A business plan requires you to address tough questions, like how you’ll market your product or service, who you’ll market to, where you’ll focus your sales efforts, what your prices will be, and much more. You’ll be able to identify concrete areas of strength and any potential shortfalls there may be. Once you’ve determined your various business strategies, it’s important to organize your plan in key sections, including things like operations, products and services, and marketing.
- Look ahead. Most business plans include three to five year projections, outlining goals and the revenue growth plan. Factoring future growth into your business plan can be an effective way to account for changes in the market, understand staffing needs, and anticipate funding that may be required. Be sure to include the proposed loan or funding that you are requesting in order to show that the business could take on that new debt, and how the funding will be utilized. This will help financial institutions or business partners feel confident that they will see a return on their investment.
- Tap into local expertise. Having a mentor or coach can be a huge asset when putting together your business plan. There are several agencies you can work with—including your local Small Business Administration Office, SCORE, and Women’s Business Center—to help you formulate and review your business plan. These mentors can provide real world advice on your plan, objectives, projections, and funding sources.
At Camden National Bank, our Business Banking Team supports business of all shapes and sizes across Maine and New Hampshire. We have expertise in the business planning process, and we’d be more than happy to connect you with other local resources as well.