Why would you say it’s important to have a business plan?
Very few people have the business skills to successfully manage all areas of an
operating business without having a written plan as a guide. For example, can
the average business owner explain the detailed cost structure of the business
or the gross margin from each sales category? People who have strong communication skills that are needed for sales efforts might not have strong financial management skills and vice versa. A business plan plugs the gaps in the owner’s knowledge or memory.
Name one common mistake that you see business owners make.
The most common mistake is starting a business with too little capital. A small business should not be started unless you have at least 9 months of operating expenses as a capital cushion. You need access to enough capital to allow your business the opportunity to operate in the market, try different strategies, etc. It might very well be in the 5th or 6th month when you reach a sustainable sales level and break-even. Or, it might take your 3-4 months to determine which advertising methods are most cost effective to generate sales growth. Without enough capital, you’re not giving your business enough opportunity to succeed.
Very few people have the business skills to successfully manage all areas of an
operating business without having a written plan as a guide. For example, can
the average business owner explain the detailed cost structure of the business
or the gross margin from each sales category? People who have strong communication skills that are needed for sales efforts might not have strong financial management skills and vice versa. A business plan plugs the gaps in the owner’s knowledge or memory.
Name one common mistake that you see business owners make.
The most common mistake is starting a business with too little capital. A small business should not be started unless you have at least 9 months of operating expenses as a capital cushion. You need access to enough capital to allow your business the opportunity to operate in the market, try different strategies, etc. It might very well be in the 5th or 6th month when you reach a sustainable sales level and break-even. Or, it might take your 3-4 months to determine which advertising methods are most cost effective to generate sales growth. Without enough capital, you’re not giving your business enough opportunity to succeed.
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