One of the keys for those who want to make money on eBay is to have a business plan. In fact, having a business plan is one of the keys to success for all businesses. But what do you do when you haven’t had any training or experience with creating business plans? Is there something else that you can do other then to purchase software or hire an expert to help? The answer is YES. You can create a business yourself. If you are seeking business financing where a business plan with specific pieces of data will be required then seek help.However, if your business plan is to be a tool or roadmap that is primarily just for your use, you can quickly and easily create a plan that will work for you. Remember that even a simple plan can greatly increase the odds that you will be success and make money on eBay. Your business plan does not need to be a long, formal document. Consider it to be a tool to help you achieve success. It is the roadmap that you will use to make money on eBay. Your business plan can include just a few pages about your business. Include an outline of the market opportunity you've found to make money on eBay. Add your strategy, strengths and weaknesses. Finish with a brief budget. All of this can be completed in a short period of time. While a formal business plan will include an executive summary and much more detailed data and analysis, this business plan will get you started. It will include the critical information that you need to get your business up and running. It is the roadmap for you to follow as you begin to make money on eBay. To Your eBay Success!
Underestimating what you need can cause problems ranging from having to go through the whole time consuming fund raising process again, to having to shut down the company because funds have run dry. Having to go back to the original investors and ask for more money often undermines the entrepreneur's credibility with the investors and can cause a significant dilution in the founder's ownership.
Obtaining more than enough capital may seem like a blessing at first, but it can breed a lax attitude toward expense control. "If you have it, spend it," is not an advisable motto for a new company. If the investment takes the form of equity, raising too much money means that the founder's share of the business was reduced more than was necessary--and this violates one of the maxims of entrepreneurship: hold on to those equity points!
Typical advice given to entrepreneurs is to do a cash flow projection, or cash budget, and then add 10%, 20% or even 50% to this amount, for "contingencies." These contingencies are all the things that can go wrong in a start-up venture, all the unfavorable events that can negatively affect results.
Contingency planning is a skill that does not come easily to all entrepreneurs--even those with a finance background. How do you get the cockeyed optimist (what you absolutely must be to even conceive of the idea of the starting a company), who expects the best, to plan for the worst?
To stimulate contingency planning, it helps to look at the reasons why entrepreneurs so consistently run out of money; among these are:
Not realizing how expensive it is to introduce a new product, especially consumer products, on a national basis.
Not realizing how long it takes to introduce a new product, or for the market to truly accept the product.
Delays in regulatory approval, municipal zoning, or patent approval.
Assuming that a small start-up company will get the same forbearance on payments and favorable terms that a large one will.
An entrepreneur with an early stage company must be prepared for one or more of these situations to occur. Contingency planning doesn't mean simply adding a percentage or dollar "cushion' to the amount of capital being sought from investor or lenders. It is a way of thinking--a recognition that the entrepreneurial road is always rocky. Envisioning what might go wrong does not equate to entrepreneurs losing faith in their product or their company; it means they accept these difficulties as steps on the path to prosperity.
Both Bob Hamilton & Dee Power are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
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