This is the second of a series of articles describing how small business owners and managers can drive their business growth and profitable development through the creation and implementation of a business plan.
I know the prevailing view among many small business people is that “planning” is for the larger, more substantial business and “they are too busy running their business to have time for planning”. Indeed, many small business owners are “too busy” running the business, but they ignore, at their own peril and survival, that “failing to plan is planning to fail.”
I am convinced that the small business owner will benefit from engaging in this business planning process because of the nature of carefully examining and thinking through the way their business competes and operates; – and how that will align with their determination of “what business they want to be in”.
This business planning process yields a stronger, more profitable business which provides real value to its customers and the marketplace.
The business planning process described in
What is a Business Plan Anyway?
As defined by Wikipedia, a business plan is “a formal statement of a set of business goals, the reasons why they are believed attainable, and the plan for reaching those goals. It may also contain background information about the organization or team attempting to reach those goals”. This is great, but doesn’t tell us much about what it truly is and how you end up with a plan.
“Writing a Business Plan?”
Cheryl describes it as a process, which really resonated with me. She said, “The process is a series of taking your thoughts and visions and applying it to paper to basically give you a fast check to say, ‘Is this really a great idea to keep moving forward with? Is this something I should do? If I can do it, how can I make it work?”
Given that it is a “fast check”, it doesn’t need to be so formal to start. Cheryl indicated that she has created many a plan for her clients based off of scribbles or business journals.
The organization of a Business Plan is very important. I use an eight section plan format that is in a specific order as each section builds from the previous section (note: you may have to jump back and forth on a limited basis between the Products and Services Section and the Marketing Section, as well as, the Strategic Section, depending on the extent of your market and product development to date). There is fluid thought and connected reasoning employed to achieve a Plan that reaches its intended purpose (i.e. to run a business, to buy a business, to enter a Joint Venture, to finance a business, to complete a particular project, etc). Although the Executive Summary is the first section of a Plan, it should be written last. All the other Sections should be developed in a build block order provided in a Business Plan Workbook Process.
“Basics Business Pland”
A Business Plan is a business document; you are not writing prose. It should contain a precise and concise format and be
There are definitely some cases where writing a business plan yourself is preferable and others where an expert third party may add value to the process.
Writing your business plan yourself
For micro businesses raising small amounts of investment (say under £50,000) this is likely to be the best approach. Apart from anything else it doesn’t make sense spending 10% or 15% of the funds you are trying to raise on getting someone to help you write a plan! Most high street banks offer on-line applications or software templates to help you. Just beware that you may have to repeat the application process several times in different format if you don’t have a stand-alone business plan.
For larger businesses too there may be value in writing your own plan. If you write your own plan then you will know every detail of it which will help you when questioned by a bank or potential investor. Everyone wants to avoid those embarrassing moments played over and over on Dragon’s Den where the entrepreneur looks vacant when asked for details of their gross margin or net profits in the
A good business plan is the most important but often overlooked part of running, starting and expanding a successful business, and obtaining finance for a business. If a plan is written properly, running a business and obtaining finance is much easier, leaving less room for error and failure. While you cannot predict everything that can happen in a company’s future, a good plan helps you avoid certain pitfalls and overcome obstacles, while anticipating and creating opportunities.
There are different plan formats for various circumstances. A comprehensive plan will help you run your business venture or project more successfully. There are also specialized plans for various purposes, such as a funding plan for a bank, investor or venture capital firm.
The business planning process is very important. It is a building block system that is continuous, systematic and comprehensive. It involves the entire company, produces effective decision making, and executes those decisions effectively in a strategic plan. A good plan also measures the relationship between expectations and performance. It evaluates your company’s progress or lack thereof.
It is said, writing an effective business plan is more art than
I have written three business plans for my own businesses. Two were for existing businesses and one for a Start up business (BOOST Business Coaching). The two plans written for existing businesses were written entirely on the prompting of Bank Managers as I was borrowing resources to invest in these enterprises. As a consequence once I had achieved this aim, the plans went into hiding and were never relevant again. In these cases the business plans were great for funding but had little else use.
The Business Plan
The latest business plan written by me was for entirely different reasons. I actually had to discover whether there was a market for my services. As a consequence of this I now have a ‘living document’ that is referred to and updated on a continual basis as my business grows and changes. The best part of this is when different tactics have been actioned and the results have been less than anticipated I have a plan B and a Plan C and can action these seamlessly into my business.
What to include in the business plan
If you don’t know where you are going (i.e. have a roadmap), then how do you expect to get there? Running, expanding or starting a business without a business plan is like trying to drive from New York to Chicago for the first time without a roadmap or MapQuest! Planning gives you a path to follow, otherwise, you are just guessing. In running or starting a business, the learning curve is short before you run out of resources and are forced to close. Therefore, a business plan helps you set up a sound framework, model and system ahead of time, as well as, address potential problems and threats, so that you can capably run a business. If you don’t have a system in place to deal with problems and you don’t have a sound strategic plan in place, you will find yourself needlessly sidetracked by working “in” the business instead of “on” the business.
A Business Plan will save you a lot of time and money. Careful planning ahead of time will help you wisely budget your resources and significantly minimize the time you spend assessing threats, problems, obstacles and opportunities.
What is a business plan used for?
Writing a business plan is not just a necessary tool for business start up. A solid plan will lead your business on the path you wish it to follow. Good business planning will serve as a roadmap to the future of your business by allowing you to properly allocate resources, focus on key business points, and prepare for any opportunities or problems that may arise as you look ahead.
How to Write a Business Plan
While there are no strict rules for writing a business plan there are some guidelines that you can follow that will ensure your business possesses a professional and effective plan. The amount of information and level of detail included will depend on the intended audience. For external audiences such as investors, lenders and government agencies your plan will be much more detailed and in-depth. For internal audiences such as upper management or board of directors the information can be less detail oriented and more goal focused. In either case all information should be factual with evidentiary back-up.
To be effective, you should include the following sections and headings:
The first step to starting anything is a plan. Whether it is a trip across the state or life’s journey, a plan is needed. Without one you will get lost. The same holds true when you start a business. Why is a business plan important? It is the blue print of your business. Every aspect of your business should be written out so you can follow it. Many people believe that business plans are for investors and lenders. The truth is that the business plan is for you. It is your vision, your map. Investors and lenders want your business plan so they can see your vision and make a sound business decision based on what the map of your vision shows them.
A good business plan has several key elements. The first and probably most important part is your vision. This is explained in the executive summary. Describe your business. What are your products? Why are your products so special? Who are your customers and why will they buy from you? Discuss the future of your business. What do you want your future to look like?
You have your
If you are serious about the success of your online business then you need to find ways to give yourself every advantage you can over your competition. Writing a business plan for your company can be a crucial step in getting your profits to where you want them to be.
I. It is one of the best ways to motivate yourself and plan how to drive your business to the next level.
2. In case your business is just an idea in your head for a long time, writing a plan will materialize it.
A business plan can serve a couple of main purpose
In terms of revenues if you have to reach to a bank for the money, the plans that has already sorted out the investment you will need? And what is your contribution to it? Can be figured a head of time.
Briefly you need to know the following:
1. Your entire business plan
2. Description of your business
3. Your Markets Strategies
4. Competitive analysis of your market
5. Development of your plan
6. Managing your business
Your company’s business plan can be one of your most important business documents – IF it is well written and usable. A plan that is unrealistic, too simplistic, or a monstrosity parked in a binder, is useless. it must be a living document for the CEO and leadership team. Business plans should be crafted with the end use in mind (always begin every project with the end in mind). Depending on the need of the business, the business plan will have different characteristics. In some cases, it might be necessary to have two versions of your business plan.
I. If the plan is to be used to attain funding from financial institutions or investors, its tone will be geared for that type of reader. The business must be described as a well conceived and viable business. Investors want to assess the comprehensiveness of the idea and/or the products and services. They will review the management team and their experience and the financials will be rigorously reviewed. The business plan
must not only be compelling, but thorough and detailed.
II. If the plan is to be used by the CEO/entrepreneur who
The idea of writing a business plan seems daunting to many. In reality, if you start with a solid framework, or outline, you will find that it goes much faster than you thought possible. Better still, you will learn a lot about your own business as you go through the process. This article focuses on common mistakes to avoid. By avoiding these common pitfalls, you will create a better business plan that helps your business to succeed and one that resonates with bankers and investors.
Mistake #1: Trying to write the business plan with just an idea.
Bam! You have an idea. In fact, you have a great idea. It is to your credit that you want to put your thoughts to paper and create a business plan. Yet, you will improve your idea and ultimately your business plan, if you let your idea incubate. In this fast-forward age, some things are still better developed over time. Think of your business plan not as microwaveable meal. Rather, as a stew with many ingredients. Each one must be added in its own time. Sample the stew and see what to add
Most future business owners create at least a simple business plan as an operating guide or to help facilitate a small business loan. If you are going to invest the time to create a plan, there are many other ways this work could and should be leveraged.
It’s true that you wouldn’t want your plan showing up on the internet for the whole world to see. But does it have to be labeled top secret and kept under lock and key? This article explores some ways successful entrepreneurs leverage their business plans to help launch their new ventures.
For any of the ideas below, always give careful consideration to who your audience will be. Next, make some decisions about which sections of your plan should be revealed. Finally, think about the level of detail you would be willing to share with your audience.
The risks of handing out copies of your business plan to a broad audience are high and easily understood. (Don’t do that.) However, properly managed, sharing your plans and ideas at an early stage can be tremendously beneficial. You will suddenly find that you
A business plan is used a lot for gaining financial support from banks, creditors and investors. Often though the small business person sometimes skips this process when they already have the funds in hand or else are a one-person show, for the health of your business, this is not always a good idea. In fact, it rarely is. Here are some reasons why a business plan is for everyone.
With every type of business venture a plan has to develop. It is rare that someone decides to make something and it just happens. Getting from concept to market takes more than drive and determination; it takes a plan. Having a clear and concise plan of how you will be doing business will pay off.
For HR, marketing, production and general company policy having a resource that is readily available to come back to saves the business owner a lot of time. For the employees having a plan laid out in black and white with everything they need to know is important as well. While a business plan is the greatest option to replacing an employee handbook, for top level executives
A business plan is the most important and often overlooked part of running or starting a business, expanding an existing business or obtaining finance for a business. If a plan is developed effectively, the success rate for the purpose of the plan rises exponentially, whether it is to start, expand or run a business, and/or obtain finance for the business.
A well developed Business Plan leaves less room for errors and failure. While you cannot predict everything that happens in a company’s future, a good Business Plan helps you to avoid certain pitfalls, overcome obstacles and anticipate and create business opportunities. When you do encounter obstacles and problems, having a Plan in place, integrated into the business, provides you with a system and mechanism to effectively deal with challenges, often turning these challenges into manageable situations or even future opportunities.
Let’s start with the fundamental questions: Why have a Business Plan? What can a Plan do for my company?
First, a Business Plan helps you run a Business and is the roadmap to business success. This is the primary reason for a Plan, and the plan should
While Business Planning may be a difficult task, especially to do it well, it doesn’t mean that you shouldn’t do it. Its benefits far outweigh its challenges. However, if you have a good Planning Process, then the difficulty of the planning task is mitigated and often minimized.
Business Planning is the Hard Part…
If the Biz Planning Process is Comprehensive and well executed, then the Planning Process itself will often be much harder than the actual running of the company. Wouldn’t you like to get the hard part of running the company out of the way upfront? Wouldn’t you want to ensure the absolute best chance to succeed with your company? Wouldn’t you want to be highly profitable verses marginally profitable? Of course you would. But to do so takes a lot of hard work, making the intangible (i.e. an idea, a new project, a new business venture), tangible.
Borrowing from the success of others in creating and expanding successful companies, can really give you a leg up in the difficult Process of converting the unknown into an executable, successful venture. This is why I wrote a
There is a preponderance of Business Plans doomed for failure in the market place. Why is this? And what makes an Effective Plan? Here are some key areas to pay attention to when developing your business plan…
The Right Business Plan Process
There are a lot of business planning books in the market place which attempt to explain and quantify the Business Planning Process. Some even claim to be the most “Comprehensive”, “Final”, “End-All and Be-All” Business Planning book. Some are workbooks or software trying to take you step by step through the Business Planning Process. Many of these books have lots of great experience behind them and contain very useful information; yet, they lack in the actual execution of a good Business Plan or are way too in depth or technical for the entrepreneur to clearly understand.
Being someone who has been developing business plans for over twenty years, I only know one way to write an Effective Business Plan: from a Comprehensive, step by step process in a workbook, building block fashion. A good planning workbook is understandable, simple and addresses all business types and
How many people have not asked this question, “If I have a great idea, do I really need to do a business plan?” The first reaction from business advisers is normally one of astonishment. “How can you ask such a stupid question? Of course you need a business plan!”
I did an interesting exercise by asking Google. “You need a business plan” produced 4.65 million results, while “you don’t need a business plan” produced 1.31 million results. Does this conclusive indicate that you do need a formal plan to make your great idea work? I don’t think so.
You don’t need a business plan (“BP”)
The advocates for this viewpoint argue that once a plan has been done completed, nobody ever refers back to it. So, why do it in the first place? Another argument is that BPs are just guesses, and they’re almost always wrong.
Three other “good” excuses are:
1. I Have It All In My Head;
2. I’ll Deal With The Challenges As They Come, and
3. A Business Plan Won’t Help Me After Start-Up.
Certain business owners believe that you only need a business plan if you are trying to obtain financing either through a bank, venture funding or an offer for stock. Others believe that you only need a business plan when you are starting up a business. Still others feel it is not worth doing a business plan because they are already in business. Studies have shown that businesses that prepare a plan and monitor their plan adapting to changes in their business have higher success rates compared to those that don’t use planning. Your plan doesn’t need to be a long involved document covering every aspect of the business but merely a plan that answers 3 simple questions.
There are various terms that describe the overall planning process for a business but in general they are all quite similar and answer some of the same fundamental questions about your business. Let’s take a look at some of the definitions of the types of plans and planning processes and the common themes and questions they answer.
A Business Plan can be defined as a description of what the entity does, the business’
A Business Plan is a dynamic document: it changes on a daily, weekly and monthly basis. By having your Plan accessible on your Company Computer Network and Online, the CEO, Executives, Management and Key Employees can use it and update it easily and effectively. In order for a Business Plan to be successful, it must be intertwined into the fabric of your business. Just writing and developing the Plan is only half the battle. Without effective Implementation, a Plan is just a document without “a soul” or purpose. A Business Plan must become a “living” document within your Organization. By using computer technology and high speed internet, a Business Plan can be readily adopted into your Company’s every day operations.
Some Tips for your Plan’s Implementation
1) Ensure it is a part of your daily, weekly, monthly, quarterly and annual Operational, Performance and Strategic Planning.
2) It is the Key Driver behind your Marketing Team and Sales Team. It is actually used as a Sales Tool to realize sales goals.
3) Forces your Marketing Team and Sales Team to work closely together. Field updates