Many people start a WISP business without a business plan and later find that lack of proper planning caused a failure of the business or that the business had to pivot several times to become profitable. It is very important to have a detailed plan in place before spending money with the initial investment.
Advantages of the business plan are;
Thoroughly understand the market opportunity, including the type of service that potential customers are seeking (the rate plans).
Through research with potential customers calculate an accurate estimate for the potential income based on the rate-plans that people can afford and the potential number of subscribers.
Prepare a marketing plan that will inform all potential customers about the service to be offered and the advantages when compared with similar services and get typical customer feedback about the plan.
Prepare a detailed financial plan for the investment required to provide a service for potential customers and add an investment timeline.
Prepare a detailed financial plan for on-going operating expenses to deliver the service to the prospective customers.
Prepare a pro forma (estimated) cash flow plan based on operating costs with expected income from customers.
Estimate the time to break even for operational expenditure vs. income.
Prepare a pro forma (estimated) profit or loss (P&L) statement for the first year of operation based on the estimated cash flow.
Estimate the time taken to recover the initial investment (ROI) based on the net margin generated by the estimated cash flow.
The entrepreneur should evaluate the possible success or failure of the business based on the analyses described above. If the estimated business results are weak then the entrepreneur must adjust the plans to identify how the business results can be improved.
How can the number of prospective customers be increased?
How can the income per customer be increased?
How can the initial investment costs be reduced?
How can the operating costs be reduced?
In addition a #businessplan will be requested whenever the entrepreneur seeks financial or business help.
When procuring a bank loan.
When seeking an investment partner.
A business plan can be prepared in a number of different formats, however two factors must be elaborated in detail.
The description of the business, the plan for delivering the services and the results expected must be clear and concise.
The plan must include all information that lenders and investors are seeking, including P&L and ROI.
Another blog post will explain how to prepare a business plan.
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