Fifty percent of all businesses will fail before their second year of operations, and 90 percent will not last beyond 10 years.
More often than not, the reason for this high failure rate is due to the fact that the owner never bothered to create a business plan before starting his or her business.
Creating a business plan may seem intimidating at first to some people, but it is one of the most important steps an owner can take to ensure the success of his or her business.
Ironically, creating a business plan is not as difficult as many people think.
A business plan starts by describing the product or service you want to offer. It outlines your strengths, knowledge, experience and skills. It also helps you identify your assets and liabilities.
Any good business plan will include a market survey. There are even companies that specialize in performing market surveys on behalf of businesses.
Because this type of service is fairly expensive, most small business owners will handle this step themselves.
Next in the business plan comes the budget. You will need to anticipate all the potential costs and revenue that you will need to effectively run your business. This will also tell you what your breakeven point is, and what level of profit you can expect to make. Don't be worried if you lose money in the first year or two; if your business is well established and properly marketed, it will eventually start turning a profit.
