Mon 14 Jul 2008
How to Determine If Your Business Plan is Impractical
As you know, it is imperative that you have a practical and achievable business plan in place before you put any money into your small business.
Here are some tips that will let you know that your business plans are impractical.
Your Pricing Is the Lowest
If you project that your sales will be high because you will be pricing your products on the lower side, then you should understand that there could be someone else coming into the market with that same strategy.
This could take the wind out of your sales - and you will have a tough time earning a profit margin if you try to slash your prices any further.
No Marketing Strategy
If you know that you have a product or service that will sell well, then you should also have a strategy to market it.
What is the use in having a solution if people do not know about it?
It is important to allocate a budget for your marketing and advertising expenses in order to develop a strong customer base for your small business.
Projecting Unattainable Sales Figures
If you project very high sales and profit margins, then you will have a tough time in attaining them if there is a sudden downturn in the economy.
Your plan should display attainable figures - and any amount over those figures should be considered a bonus.
No Long-Term Financial Plan
If you have decided to invest money in the business just at the outset, then you are asking for trouble. You should know that you will still need extra money to run the show over time.
Not having a plan for further financing or to raise cash during an emergency could seriously jeopardize the stability of your business.
It is vital to have a practical and manageable business plan in place, so that you are not bogged down in financial or marketing quicksand once you have started your small business.