A good idea is the beginning of any business. But, in addition to this, it is important to decide whether the business will be profitable and how to organize everything.
Why do you need a business plan?
It is required for any business, even the smallest one. After all, with its help you can evaluate the prospects of work, difficulties, etc. and, most importantly, a business plan will give an understanding of whether it is necessary to start everything.
Example on cakes
A person studies to be a pastry chef, acquires everything necessary for work, and advertises wherever possible.
Then the first money comes. As a rule, the confectioner thinks that he has done a great job and that no calculations are required. But the lack of a business plan does not allow him to develop and reach a new level.
The next step is to analyze the entire market for such products and see what competitors are offering.
This is necessary in order to change the recipe, decorations, and the format of the business as a whole. This will help grow, become better, and, as a result, earn more.
The plan will help:
- calculate the costs required to start and develop the project;
- understand which tax deduction system is suitable;
- decide what will bring profit and its expected size;
- conduct a competitor market analysis;
- understand how the matter will progress.
How to understand how much money you will need at the start
First of all, you need to have an idea of how everything will work, make a complete list of what you need to start. It is very important to include everything down to the smallest detail, otherwise there will be an unpleasant surprise in the form of additional expenses.
Understand whether employees will be needed, how many and what salary to offer them.
How to predict potential profit
To do this, you need to understand what product you will sell, its price and how much you will be able to sell within a month. To do this, you need to analyze similar products.
If you want to provide certain services, find out what other professionals charge for them.
How to understand using the example of a cake:
- a kilogram costs $20;
- multi-tiered can be offered at a higher price;
- markup 20-40%;
- you shouldn’t set your price higher than your competitors’.
Advice! At first, you shouldn't overstate the price, it's better to define its upper and lower limits. This should be done in order not to sell the product below its cost price.
Once the price is determined, you need to figure out how much you can produce monthly. Then, simple arithmetic and you have the size of the expected profit.
How to stand out from the competition
First of all, it is worth studying the products they offer.
Example on cakes:
- make some product your specialty. For example, cakes in the form of a racing car for boys and in the form of doll houses for girls;
- it is important that competitors do not have similar offers.
Earlier I talked about how to stop living paycheck to paycheck .
