“Have Business Plan or Bust”

More than ever, it’s vital to have a plan for your business. And, I’m not speaking about having a marketing strategy just for when starting a new enterprise or making use of it for a business loan. Every business, new and established, must periodically re-evaluate their current plan to see if targets are being met or if they’ve changed and what the brand new strategies are.

Without planning and a strategy, an organization is simply “guessing” and has nothing solid with information on paper regarding the business’ successful attainment of goals.

Do You Know What a Business Plan Really Is and Does?

Many individuals have no idea what a business plan’s purpose actually is. That is the largest reason why people have so much difficulty writing them.

In a nutshell, such plan is about results. Your plan is a direct reflection of your purpose.

The long clarification of what a business plan is: any plan that works for a business to forecast what may be ahead, allocate resources, focus on key issues, and put together solutions to problems as well as opportunities.

Now, a ‘start-up’ plan these additions:

1. A summary about what the enterprise is and does.
2. A mission assertion that lets employees, clients, and lenders understand your ethics and goals.
3. An inventory of keys to success.
4. A market evaluation to determine who your opponents are as well as public demand for what you are promoting.
5. A break-even evaluation to seek out out when you might recoup your funding into the business.

A start-up plan for your small business will certainly settle any doubts as to whether or not to pursue beginning a business you take into consideration, but will also serve as your roadmap to take you to the next levels of growth.

Your plan will rely greatly on your specific business. The bottom line is to make your marketing strategy and business plan match your purpose.

Case Studies of Business Plans

With no plan, you don’t know where you’re going and you don’t know methods to get there.

1. Case Study of a Massage Therapy Business: Take the case of a therapeutic massage instructor who had a group of 30 students. Of course, every student’s dream was to graduate and begin their own massage therapy business. But there was a big problem: they graduated and thought they’d simply get clients with business cards and people would flock to them. Only TWO out of the 30 students went on to start out their own businesses. You see, whereas the rest might have mastered therapeutic massage strategies, they weren’t educated in business, let alone create a plan.

Now let’s take a look at how three companies created their plans according to their purposes:

1. Case Research of a Bicycle Frame Manufacturer (manufacturing): A high-end bicycle frame producer that caters to bicycle racers would need to set themselves apart from mountain bike producers and cyclists. As a result of how aggressive racing has become more popular, their plan contains how they may add extra workstations and designer-builders to increase its capability for customized frames. Their plan would additionally go on to explain how they’d use current leased space to make more room for the workstations. Plans are also laid out as to how additional tools for the workstations will likely be obtained.

2. Case Study of a Computer Training Company (service): A certified pc trainer with intensive experience is seeking to increase his enterprise to supply on-web site corporate training and managing coaching and upkeep operations for a large laptop corporation. In an effort to accomplish these objectives, he plans to build on his experience by creating a group of courses designed specifically to help small companies successfully use the preferred business software program packages.

3. Case Study of a Vending Cart Enterprise (retail): A fast-food vending cart enterprise proprietor operates his business on an indoor/outdoor basis. The indoor food cart sales have increased in high-rise business buildings in his downtown area. Consequently, this owner would like to borrow $1 million so as to increase operations by way of the acquisition of extra vending carts. He has an excellent relationship with three banks so, therefore, he simply needs to add a supplement to his current plan because the banks have already got his financial information and know his intended buyer base.

Now that you understand more what a business plan is and does, it’s time to start out….

Writing the Plan for Your Business

So, what are the obligatory elements in a business plan and what order do they go in, right? The how-to’s on that topic are a lot better addressed by an eBook or business plan template where you can ‘fill in the blanks’.

Other locations you possibly can search for steering and run searches for online are (“b”=business):

1. Sample enterprise plans
2. B-plan outline
3. B-plan examples
4. Free b-plan template
5. B-plan software programs

You can additionally search for books on Amazon.com and videos on YouTube, as well as web-based plan information, one one of which being, How to Write a Business Plan.

Simply remember: a business plan reflects your purpose and gives you and others a map to follow to get your business to where you want it to go successfully.

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 first year of trading!

Writing your own plan might also show your all round commercial ability to appreciate all aspects of the business and with that there is a good chance that you will understand how to drive it towards success. Software & templates abound on the internet to support this approach and there are plenty of “Do’s and Don’ts” published free to guide this process.

The draw backs of this approach are that many people do not have all the financial, sales, marketing, operational skills and experience necessary to construct a good business plan. They may also lack the ability (or time) to integrate them into a solid business case. Some people may not have the writing skills to bring the plan together. Finally, some people may find themselves “too close” to the business to clearly and simply convey the business opportunity. Weakness in any of these areas may reduce your chances of securing funds.

Business Plan Writing Services

The alternative is to get some help from an experienced hand. Historically accountants and sometimes solicitors as well as independent copywriting services have offered these services.

However, there are now an increasing number of companies specializing in providing business plan writing services. These companies bring specific independent expertise to the table. As well as writing skills they can have a broad base of commercial experience including financial forecasting and by nature of their independence can provide an objective perspective on your business.

As well as offering writing itself (both financial forecasting and the written plan) they may also offer help with research and feasibility and introductions to potential sources of funds.

When selecting business plan writing services there are a few good guidelines worth following:

1) Commercial Experience – The ability to write well is not enough to make your plan investable – this is not simply a copy writing exercise. If you are going to secure funds you need to construct a business case that integrates all commercial aspects of your business. So, be sure that the people writing your plan have several years of senior commercial experience – the broader the better. This commercial experience should include budgeting or forecasting – your financials are a critical part of your plan.

2) Track Record – Many business plans are confidential so do not expect to see many examples. However, companies should be able to provide written and attributable testimonials from clients.

3) Pricing – Services range from around £2,000 for small start-ups upwards to £15,000 for larger corporate plans. As with most things, you get what you pay for and the price generally reflects the complexity of the business model. Make sure you ask for a specific proposal that outlines exactly what you are going to get for your money, the timescale and price. Consider “virtual services” rather than “face-to-face” consultants to reduce your costs but not the quality of work.

4) Ownership – one potential disadvantages of having a plan written for you are that you will not “own” the business plan and be totally familiar with it. So, ensure that you are fully involved in the process and that there is time scheduled for you to review and discuss the financial forecast and written plan with whoever is writing the plan for you.

5) Funding – Have plans that they have created secured funding? Whilst funding depends on a wide variety of factors and not just the quality of the business plan (state of the market, availability of capital, product, service, proposition, management team etc.) any specialist service should be able to quote a few examples where their plans have helped to secure funds.

For most people who do not possess experience of writing business plans you may improve your chances of securing funding by engaging a specialist writing service to help you create a plan. However, make sure you are fully involved in the process – you need to own the plan at the end of the day and know it inside out and backwards – your future is in your hands not theirs!

Why would you want to write a basic business plan as opposed to a more elaborate one? Most business owners I know struggle with the idea of writing a full-blown plan for their business. To be completely honest, writing a plan for anything, let alone a business you own or intend to start, is challenging because…

1. we don’t know where or how to start
2. we want our plan to be perfect the first time we write it – as in, we don’t want to make any mistakes
3. we don’t like to write – and let’s face it, writing a plan involves writing.

I’m going to share with you ways to overcome each of these hurdles. But before you do anything, allow yourself to break the process of business planning into small steps.

The first step is to have a basic plan which will serve as the foundation for a more detailed and comprehensive plan down the road.

How to Start Writing Your Plan

What goes into a basic plan? Well, let’s first define a basic plan as a plan for the bigger plan you will arrive at later on.

Here are the essential questions you need to answer:

1. What do you want to gain by writing this plan?

Is this plan an internal plan which you will use to guide yourself or your team towards achieving specific and measurable targets? Or are you aiming to attract potential investors? Is this something you would like to take to the bank to propose a loan for your business?

Begin by examining what your specific goal is for writing your plan.

2. Who is going to review my plan, and what do you want them to do with it?

You need to identify who is going to actually study your plan, and what they are going to do with it. If it’s yourself, then it’s a little easier to answer this question because the answer lies within you.

If, however, you are writing your plan for others to review, and assuming you’ve answered #1 above, you’re going to have to do some background analysis.

Start listing names or titles/positions of people who you expect to review your plan. Then, for each person, brainstorm how you want that person to react to your business plan – what they should do with it.

You could do the same thing for investors – do you know any business owners? Ask them what they would look for in any business venture they would invest, and specifically what they would look for if you wanted them to invest in your business.

3. What is the core product or service your business offers to buyers?

To answer this, write down the product or service you intend to offer as simply as possible. We’ll answer more detailed info about it in the following questions.

4. Who is the ideal customer for this product or service?

Really, ideas for business are a dime a dozen. You often hear people talk about a great business idea they have, but they rarely back it up with any kind of proof that a customer exists for such a product or service, and that that customer would be willing to pay.

Try to be specific in profiling your buyer. For example, does your product or service cater to men or women, or both? What age groups or income levels does it service/attract? Are there any geographical areas that your product or service would supply?

5. Is there enough demand for your product or service?

This is something you’ll want to investigate in more detail as you develop your business plan. At this point though, what’s important is to do some preliminary research. Searches on Google, Hoovers or Bizminer will help you study a particular industry, and you can often drill down your research to a particular state or city. Your search at Google is of course, free, but you’ll often find for a small investment at sites such as Hoovers or Bizminer, you’ll get meaningful data for your market vertical, which you can start analyzing right away.

It’s also not a bad idea to survey buyers on their purchase behaviors and perceptions towards your product or service. Arranging a questionnaire or focus group can give you some useful insight into how potential buyers react to your product or service.

If it’s reasonable, consider giving away product or service trials and then follow-up to evaluate user expectations and experiences.

If you don’t have demand for your product or service, it really doesn’t matter how great it is anyways, right?

6. What existing problems or needs does your product or service solve for your customers?

This is one of the most important questions to answer, because ultimately, your product or service is just another one available unless it clearly and uniquely solves a problem or need which buyers face.

To give an example, let’s say your product is a software application that helps you manage your finances and taxes. There are a few applications in the market which do that already. So, what does your application do that others don’t? Is it better on features, is it faster? Is it more secure? Is it more user-friendly? Is it more portable? Does it really help someone save money or increase their net worth?

Can you see why getting clear on the solution you offer to your target market is so crucial?

7. Who are your direct and indirect competitors?

You really should gain at least an initial understanding of who else is offering similar products or services to your target market. It’s good to know how their products or services are currently used and perceived – why people buy them, and why they don’t. In doing so, you begin to understand the strengths and weaknesses of your competitors from the consumer’s perspective.

Depending on what your product or service is, you can find all kinds of information about user experiences with your competitors’ offerings. Sites like Amazon let you see product reviews by customers who bought products.

8. What do you need to get your business rolling/growing, and what will it cost?

This is arguably the most painful part of business planning. Yet, what is the point of having a plan if you don’t know how it all adds up financially? You may not know how to put all the numbers together on your own. If that’s the case, invite or even hire someone to help you sort out the numbers.

Aside from any potential revenues earned from sales of your product or service, you’ll need to know your fixed expenses – what it costs you to run your business whether or not you sell a single item, and your variable expenses – what it costs you for each item sold.

Naturally, in the early stages of planning a business, you will be doing a lot of forecasting, and your numbers may not be as accurate as you’d like them to be. So, you’ll want to be as conservative as possible about how much revenue you’ll generate and how much your business will cost to run.

9. Putting your plan to action – what are the key steps you need to take?

At some point, the plan needs to hit the road! The plan is no good if it doesn’t help you take action. So a simple action plan should be included – what needs to be started and completed, when and who will do it, all need to be mapped out at least at a basic level.

Having an action plan will also help you get excited about your business venture, as you can see how it comes to life.

10. How can you improve your plan?

Once you’ve answered these questions, you have a basic blueprint of how your business is going to look at the early stage.

Remember, your first step is to prepare a basic business plan that serves as a foundation. From this foundation, you will want to further explore areas which need more analysis and testing, while some aspects of your business venture merely require you to get started and measure how things are going.