Don’t Even Think about Starting a Business Until You Have a Plan
I
always have lots of ideas. But I’m not the most organized or efficient person. To get anything done — and especially to do it well — I need to write things down in detail.
That’s where business plans come in handy. More than an idea, a business plan is a literal blueprint for business success. Simply defined, a business plan is a special document which entrepreneurs use to map out key details of their businesses, and to plot their short- and long-term plans for future success.
Of course every businessperson has a “business plan’’ in his or her head. But there it’s of little use. A general notion of where one wants to go and how he or she will get there rarely gets optimal results. But goals that are written down in concrete form are more likely to be achieved. That’s why self-improvement experts always urge others to write down their goals.
External and Internal Uses
A Business Plan is useful for such purposes as:
External
· Obtaining loans
· Attracting partners or investors
· Gaining new clients
· Getting grants
· Educating others about your business
· Selling the business
Internal
· Planning and sharpening your focus
· Reminding you of your goals
· Keeping a group on the same page and clarifying objectives for everyone
· Measuring progress
External uses are the most common impetus for business owners to write their business plans. A loan is suddenly needed, so a plan is whipped up and submitted. In the absence of such external pressures, no plan is made.
But internal applications are of even greater importance, because the business plan is the compass that guides the entrepreneur. Just the process of writing it forces business owners to focus their goals in detail. Marketing offers a good example of a business plan’s value for internal planning.
Planning a marketing strategy requires careful thought, wise budgeting, and sound strategic choices. Not all media, for example, will be equally suitable for your needs. In this section, you should address such considerations as:
· Budget
· Target Market
· Positioning Strategy
· Competition
· Media
· Timetable
· Personal Selling
You’ll need to spell out as many details about these and other marketing considerations.
Key Ingredients
Include the following key ingredients in your business plan.
Cover. Select a fine cover for your plan. It need not be expensive or fancy. You can get ideas in office supply stores. For a relatively small and compact plan, a flexible cover might be best. For a larger work, a hard binder might be preferable.
Cover Page. Identify your document: “Business Plan for (your company name).” Include your name (as author), company name, address, phone number, e-mail address, web site (if applicable) date, and other pertinent information.
Table of Contents. List your contents in clear and simple terms, and include page numbers.
Executive Summary. Dedicate no more than one page to a general overview of what is contained in the following pages. Detail is not needed except in identifying the nature and purpose of the document.
Company Background. Define the nature of your business, and explain when and why you launched it. Give some brief details, but also demonstrate your passion about your enterprise.
Mission Statement. Provide your company’s overall reason for existing, and your strategic objectives. It might be, for example: “To produce a full line of newsletters for retailers,” or “To be the primary provider of a full range of personal home services for residents in Marble County.”
Products and Services. Identify your main offering, and list specifics. If you sell jewelry, for example, you should indicate that and list the particular items offered. But even if you offer only products or only services, remember that the two always go together, and that should be clarified. One who sells exercise equipment, for example, also provides the “service” of explaining the equipment, shipping it, etc. Likewise, a service provider — such as a builder — might also provide certain products, or at least uses certain products in providing the service. If so, point it out. Be as clear and comprehensive about your offerings as you can.
Competition. Define your competitors, and how do you stack up to them. What new rivals are on the horizon? What are your competitive advantages, and how do you plan to compete? Where do you see yourself competitively in years to come, and why?
Marketing Details. (See the previous example.)
Management. Define your job and responsibilities. Name any others who exercise key roles in your business. Provide background information on key managers.
Vendors and Partners. Include information on regular vendors and partners with whom you work.
Company Objectives: Short- And Long-Term. Similar to the mission statement, this might be a bit more specific and concrete. It might also focus more on a particular near-term goal, such as adding an additional product offering, or tapping into a new overseas market, for example.
Financial Details. This may include whatever you need or wish to provide. Typical details would include specifics about:
1. Capital base. What are the financial nature of your business and specific sources of revenue?
2. Assets and liabilities.
3. Income and expenses from the last five years.
4. Financial objectives. How much will you raise your income, cut certain expenses, etc?
5. Debts and creditors.
6. Accounts receivable. How much are you owed, and by whom? When should it be received?. (You might include a page spelling out your collection methods or plans.)
What You Want From The Reader. Let the reader know what you specifically want from him or her. If you’re applying for a business loan, for instance, spell out your needs and reasons. Leave nothing to someone else’s guesswork.
Appendix. Include such supporting materials as your resume, financial charts, growth projections, or market factors.
Supplementary Materials. Submit additional information, such as brochures, financial data, or anything that would be helpful to your reader.
Preliminaries
Begin your Business Plan as soon as you can. You don’t want to wait until the pressure is on to suddenly write one. Don’t, however, expect to complete it right away—or even ever, for that matter. Your Business Plan will constantly change and evolve, and will need periodic nurturing and modification.
Understand that readers will want to view the inner substance of your business through your Business Plan. Your Plan should be more like a full-body x-ray than a vague overview. In order to satisfy your readers, moreover, you’ll need to know as much as possible about their interests. So ask recipients ahead of time what they would like to see in your Plan.
Begin with an organized outline of your Plan, and write down everything you want to include. Then organize your material in logical order. This process of examining and spelling out your ideas will allow you to think about matters that you might not otherwise consider. The process should also trigger many fresh ideas.
Instead of going it alone, invite those who can be helpful to participate in the drafting and upgrading processes. Others can provide new ideas and insights that might not occur to you. On the professional side, business consultants might help, as well as some accountants and even professional writers. Opt only for those who have demonstrative experience in preparing business plans.
You might also be able to obtain some free help through professional associations, your local Chamber of Commerce, or even nearby business schools. The Small Business Administration (www.sba.gov) also provides some useful tips and samples at
sba.gov/smallbusinessplanner/plan/writeabusinessplan.
You might also get some good tips through a number of business plan software packages that are available online (by searching under “Business Plan Software”) or at stores that sell business software. You’ll find a wide range of options in both price and format. If cost is an issue, you can start with the more basic formats and upgrade at a later time.
Two options are:
Biz Plan Builder
http://www.jian.com/software/business-plan/index.html
Business Plan Pro
http://www.paloalto.com/
Review them for ideas, BUT don’t copy any. Add: 4/2010
