Business plan for wood lovers

The fears you don't face become your walls.

Starting with this article I will give you a quote to inspire you. Today's one sounds very good in English and from my point of view, it's hard to translate into Romanian. But I would try a translation (an adaptation) as follows "The fears you don't face limit your world." Beyond this world you will not know what it is, you will not know. It's my adaptation. I even challenge those who criticize me on Facebook for not using Romanian to provide a better translation. That's the best I could do. 🙂 The message is very good for anyone, but especially for a future entrepreneur. You have to be prepared to face all the problems that will come. Otherwise you will not succeed.

In the previous article I presented you the business ideas. I didn't even distribute it properly on Facebook when a new idea appeared. Even though it was reported in a tone that I thought was superior, it caught my attention. So I added this idea to the article presenting business ideas for wood lovers, which you can read it in the following link.

The text you are reading now is part of a series of articles that aims to bring information about business and entrepreneurship closer to small entrepreneurs in the wood industry. If you want to find out more about where we started, read also this article.

Make your own business plan

First of all, I'm not going to focus on the structure of the business plan, I don't want to teach you how to make a business plan with which to access a loan, for example. In cases like this you need to call in consultants, people who specialise in structuring information so that it can be processed properly by those who will analyse it. My intention is to give you some pointers, mostly from my own experience, that will help you to make your own business plan.

Over the years I have read all sorts of texts like "everything you need to know to get started in business and build a successful business from the ground up". There's not everything you need to know. There are no recipes for success. The first step in building a business is to make your own plan. Then stick to it and adapt it to the realities and situations you face. That's how I'd like you to think about this business plan. It will be primarily built by you for you. It must represent you and be realistic.

At the same time, your business plan must be easy to adapt to new realities. Because, in general, the business plan contains what you want to happen, not what will actually happen. That doesn't mean you're better off making it superficial because you'll have to adapt it along the way anyway. No way! You need to analyse the strengths of your future business, but (especially) also its weaknesses.

Also think about how you will react to possible scenarios where figures, data, situations analysed in your business plan change. If you ask yourself the right questions and give yourself honest answers you are well on the way to building a good business plan, an excellent tool to help you put it into practice. The more informed you are about the challenges ahead, the more prepared you will be for them.

The business plan contains the essential ideas, directions and figures for you and your team. Its execution, how it will be implemented or how you will manage the business, are just as important, maybe more important.

What the business plan should contain

The most important, in my opinion, is the information collected to build it, its accuracy. I start from the assumption that if you already have the business idea, you also know what you will sell. In this case, the most important chapters your business plan should contain are:

1. Market analysis

You need to know the behaviour of those in the market, the market trends. It will be easier for you to succeed in a rising market, for example, and harder in a falling one.

You need to know your competition. Know the price at which a similar product to the one you are selling is sold and know the costs, the resources you will allocate to produce it.

When I say market, I mean the exact place where both the sellers (your competition) and the buyers (your customers) of the product you will be selling are located at any given time. I specify this because, for example, many people confuse and compare retail (retail) sales prices with production costs (allocated resources) up to the factory gate. That's how you compare apples to pears. You don't show all the marketing, transportation and distribution costs that help your product get to the shelf, to market, to sell. Without these costs it is stock in trade. It will be harder (or at all) to convert it into sales (revenue, in accounting parlance). In most cases, these costs are very high, they can double or triple your total costs. I'm not exaggerating at all.

2. SWOT analysis

SWOT, an English term, is a widely used tool that allows you to analyse your business from the following perspectives: strengths (Sstrengths), weaknesses (Weaknesses), opportunities (Opportunities) and threats (Threats). Draw a horizontal line down the middle of a sheet. Then, perpendicular to the middle, a vertical line. The 4 areas thus obtained are filled in with the strengths, weaknesses, opportunities and dangers of your future business. In this way you study, analyse, look for ways to highlight your strengths and ways to correct your weaknesses.

3. The team around you and their costs

The team is very important. This whole plan must be put into practice. How well it goes depends on your team. You need to know how many people you need and what role each one has in your organisation, whether it is smaller or bigger. Equally important is the level of costs your company will incur in supporting salaries.

4. Product, marketing, sales

To sell your product you need to know it very well, to be able to describe it in the smallest detail, to be able to present the benefits that customers will have if they buy it. Then you need to establish the product variations and pricing policy, how they change with the product characteristics. All this information, together with other market-related information, will form the basis of your marketing and sales strategy.

5. Budget, cash flow

It's very important to know how much money you'll need to get started and where you'll get it from. It is important to make a budget that forecasts both the income (sales) you will have and your future expenses. It is important to forecast as accurately as possible how your cash flow will fluctuate so that you don't block your business.

These are the most important topics to think about and include in your business plan. Next time I'll talk about budgeting.

I plan to update the article with information from you, as I do all other articles for small entrepreneurs. If you want to add something, ask me a question or clarify some passages in the text better, leave your message in the comments area below.

I hope the above information didn't scare you, and it all seems harder now. The good news is that being an entrepreneur is a race where you don't have to be number one to be a winner. You just have to make a profit at it. I'm here to help.