We first discussed the purpose of business planning. This was what you as a person want out of the business. Some of the reasons could be things such as having a healthy income, wanting to make some good profit or even having enough money to give to charity and help other people. It is important that you are truthful with yourself about what you want to achieve through the company.
We then discussed the type of businesses. These include Freelance, Ltd, Semi-partnership / partnership.
It is also important to know what nature the business is. Obviously, you can not be starting a business that is illegal. You should be thinking what you can be doing and not just what you want to do. As a designer, for example, you may move into other markets and not just advertise yourself as a graphic designer, but as a general designer in general.
Finally, its is important to think about where the business is going to be located from a geographical standpoint. When starting up a business you need to be realistic, therefore it is a good idea to start in the UK and prove yourself in that market first before moving over to somewhere such as New York. It is a realistic goal to want to open a practice in America, however, that would be more realistic further down the line.
All of these things need to be carefully thought out. These aspects are fundamental to success as if you have no direction, you will drift and unlikely be able to succeed. If yo have the knowledge of where you are, it will allow you to plan where you want to be. You should not start a business if all of these aspects are not hammered into place.
Plans should deal with 3 distinct scenarios:
GOOD - What you hope for works.
BAD - You are making enough to just survive, breaking even. Struggling to keep afloat.
UGLY - Open for business and nothing happens.
It is important to address what you would do in each situation.
You should always split your needs into two groups.
Group A - Personal life costs
Group B - Business costs
Co-mingling these figures can make things confusing and can loose your money with the tax man.
To conclude, these things help you to realise when it is time to kill off the business.
