I’ve said it before and I’ll say it again (with thanks to the inimitable J. Woden): ‘Failure to prepare is preparing to fail.’ For most things in life you need a plan – you wouldn’t drive your car somewhere new without a road directory, so avoid heading into uncharted financial territory without a business plan.

When I decided to open my first salon I was flat broke, in debt and had nothing but a great business idea. The bank turned down my first loan application and, because my parents were far from wealthy, my father approached his boss for a loan on my behalf. It was then, at the age of 20, that I learned the importance of a structured business plan. My father’s boss made me put my idea down on paper. At the time I thought this was lame but, as it turned out, he did me the biggest favour of all time.

To succeed in stating a salon, you need a PLAN. It’s your blueprint, a step-by-step guide to fully understanding everything it takes to put your business together, track its growth and ensure its survival. Many stylist’s and therapist’s devote too much time to thinking about (and discussing) their amazing salon or spa concept, while too few bother with the formality of a business plan.

And a plan is absolutely vital if you’re seeking finance. No lender (repeat: NO lender) will give you money without evidence that you’ve done the research and know what you’re doing – and that’s a carefully constructed, well-written business plan. Lenders will interpret your hair salon management skills first with a good solid understanding of your business plan and other current salon management topics such as having good salon management software and so on.

I would never go into business without one. It doesn’t make sense to stare risk in the eye without a plan of action. It helps you set goals, determine the turnover necessary to make a profit, better understand financial systems and procedures, assess your marketing needs and establish operational strategies that get you where you want to go.

At times, putting a business plan together can be the most annoying and frustrating activity you’ve ever undertaken. It will stretch your imagination and test your commitment and motivation. I’ll warn you in advance, if you don’t feel fed up and frustrated at some stage of the process, then you’re not going about it properly. If and when it happens, say to yourself: ‘It’s dangerous when things always go the way I want, because then I’m not being challenged.’ The upside is, you’ll have to take an objective look at your business concept, assess its (and your) strengths and weaknesses and recognise the challenges you’re likely to face in the future and might otherwise have overlooked!

Tip bit:
Don’t employ someone to write your beauty salon plan’ it’s your vision, nobody knows it better than you, and preparing your plan will be a valuable learning experience. This is not the time to be lazy. By all means ask a coach or mentor to assist you, but only if they have the necessary experience.

Are you wondering if you really need a business plan for your catering business? Perhaps you are thinking that as you only plan on starting a relatively small business it won’t really be necessary. Many people think like this and, of course, many people end up failing in their first year of business.

We highly recommend that you avoid becoming yet another business that underestimated costs or found that the market wasn’t ready for what they had to offer. Below we have outlined ten reasons why you must prepare a catering company business plan. We explain how if you do take the time to prepare a plan you will be increasing your chances of being successful with your catering startup.

1) Start in the Right Direction

Many entrepreneurs think that they can start out without doing a lot of planning and research. They feel that they can always pick up a feel for the business as they go. However, some of the early decisions that you make in the life of your business can be difficult to reverse at a later date. You need to have a clear path set out ahead of you so that you can make the right decisions about how to set up the business right from the start.

2) Reinforce Your Ideas

As you slowly get ideas about the catering company that you want to start you will find that these thoughts start floating around in your head. What you imagine yourself doing is often very different from what you are able to do realistically. Nothing is impossible but you just need to work out how to get there.

By putting your ideas down on paper you will be clarifying them in your mind. As you write you will find that you do additional brainstorming. You may get new ideas about what you want to do with your business and you may decide that some of the ideas that you had initially are not really feasible.

3) Figure Out How to Do It

Every entrepreneur has a very idealistic image in their mind of the kind of business that they want. Getting to that point is a process though and you need to work out a path to get there.

One great way to figure out how you will proceed is to first write down what you want to do. Next, write down as many questions as you can about how you are actually going to do it. These will include questions like ‘Will I do on-site or off-site catering?’, ‘How will I get access to kitchen facilities?’ or ‘How many catering jobs will I need to land each month to break even?’. As you slowly work out the answers to the problems that you come across you can write them down in the appropriate sections of your business plan.

4) Know Your Startup Requirements

When you prepare a business plan you will get an accurate idea of exactly what is needed before you launch the company. You will need to consider all of the things that you will need to pay for prior to opening such as catering equipment, initial advertising and so on. When you have calculated the total cost you will then know exactly how much money you need and can look at where this funding will come from.

5) Increase Personal Productivity

You have to be organized when you start a business. Rather than writing things down on loose scraps of paper and hoping for the best you need to have somewhere to compile all of the important data that you collect. A business plan is ideal for this purpose. If you store the business plan as a document on your PC you can simply add new information as you come across it. If you have done your research and have all of you information stored in one convenient location you will be more organized throughout your business launch and you will avoid a lot of unnecessary headaches.

6) Prove the Viability of Your Idea to Others

A business plan is a great way to prove to yourself that your ideas are viable and that the catering company that you are proposing can thrive and make a profit. You will also need a plan in order to prove to other people that the business model that you have in mind is financially sound. Think of your business plan as being like a resume that you can hand out to people who need information about your business. You can always leave out sections that are not relevant to the reader in question.

There are many people who may wish to view your business plan and you should keep them in mind as you put it together. If you are seeking funding then you may have to show the plan to prospective lenders or equity investors. As a caterer you will certainly have to comply with local health and hygiene requirements and these local authorities may expect to see a section in your plan relating to these areas. You may even need to show your business plan to the owner of any kitchen premises that you hope to lease before they agree to sign an agreement with you.

7) Set Goals and Objectives

A business plan is like a road map to success. Your goals are the destinations that you are aiming to get to. They should be fairly realistic and achievable but should also push you to work hard to reach them. You may set financial goals that set out what kind of gross or net monthly income you intend to be earning after your first year. Other goals could also refer to other metrics such as average food cost percentages on catering jobs for example.

8) Identify Weaknesses and Strengths

It is important to assess your strengths and weaknesses and how they will affect you when it comes to competing with the established players in your local catering industry. You may bring competitive advantages to the business such as catering experience or local food and hospitality industry connections. You may also identify personal weaknesses that you can work on improving or weaknesses that your company will face when compared to your better established competitors.

9) Track Your Progress

A business plan should not be forgotten about once the catering business has launched. Refer to the plan regularly to see if you are on track to hit the goals that you set out. Make changes to the plan as you go so that you always have a plan in place for your business going forward at least two or three years.

10) Make Selling Out a Breeze

Many caterers end up selling their businesses if they retire or move on to other projects. A business plan that is up to date can really help when it comes to valuing your business for a potential sale. If your business offers a buyer a blueprint for managing the business and it offers solid proof that the business is making a profit then it could really help you to seal a deal at a favorable price.

Perspective business owners are prone to many mistakes when starting up a new business. One very common mistake is writing a bad business plan. At times, they fill the business plan with what they think investors or banks want to see instead of what will realistically happen. Then, when the bank turns them down, they sit back and wonder why. Here are five of the most common mistakes business owners make when writing an internet business plan template and ones that you would do well to avoid.

· Dismissing losses during the early stages of the business – losses are part of starting up new business, everyone knows it, and it is expected. Concentrating the business plan on only long-term profits will bring more questions than confidence. The first year of the plan should be laid out in full detail, including expected losses. However, the business should show reasonable progress over that time, even if it means the business will continue to lose money for a short period thereafter.

· Thinking your business is totally unique – few businesses created today are not already in circulation. However, improving on an already existing concept is what can turn a loser into a winner. Trying to sell investors on a “one-of-a-kind” business will have them running for the door. Show previous models and show how your business will improve upon its weaknesses.

· Painting an unrealistic picture of yourself – while this may fool investors, it will not help the overall success of the business. It is better to actually admit your own shortcomings and show how they will be overcome. Mention hiring someone to fill a specific role because it is not your strength. Doing that will work much better than being asked a question about something you claim to be an expert on and then stammering your way through the answer.

· Being overly negative during the early years – while we do not want you to expect to turn an immediate profit, nor should you overestimate losses just to play it safe. If projections have the business making money in the second year, state exactly that. Just make sure the figures are accurate, well researched, and not over-exaggerated in either direction.

· Expect you business plan to be perfect – while we would all like to think we are perfect, there will be weaknesses to the business plan. However, this offers an opportunity to shine. This ties into not painting a picture that you are the all-knowing new business owner. Put the weaknesses out in the open, because they will be found if you don’t. Admit that you know certain areas are suspect, but present a plan to find a possible solution to the problem.

The internet poses enough of a challenge to new businesses, so don’t compound the problem by making one of these mistakes when creating your internet business plan template.