Thinking about starting a
business? Great! Have you got a Plan? That's Plan with a capital "P"
for Business Plan. If you haven't written you plan yet, your
business is still in the fantasy stages.
That isn't harsh; it's how it
is in the real world. A company's business plan is what lenders such
as banks and the Small Business Organizations use in deciding to
lend you money. It's the main company document that your employee --
and you -- use to gauge your company's success and to make decisions
about what you should do first, second, or not at all.
If you are starting a
home-based business on a shoe-string, some of these suggestions
probably aren't necessary, but you still should create a plan that
outlines your goals, expected costs, marketing plan and exit
strategy. A business plan is your road map for how you expect to
succeed and how you'll measure success.
Here is a quick nine-step guide to
what you will need in your company's business plan:
1. An executive summary outlining
goals and objectives.
The executive summary introduces your business strategy and probably is
the most important section for lending institutions. If you can't persuade a
loan officer in the first two or three pages that you've got a viable
business proposal, you're going to leave empty-handed. This summary is also
important as a communication toll for employees and potential customers who
need to understand -- and get behind -- your ideas.
2. A brief account of how the
Clearly explain the origins behind the company's creation and how you or
your business associate came up with the idea to start your business.
3. Your company's goals.
Explain in a few paragraphs your short - and long term goals for the
company. How fast do you think it will grow? Who will be your primary
4. Biographies of the management
The management section should include the names and backgrounds of lead
members of the management team and their respective responsibilities.
5. The service or product you plan
A key aspect of this section will be discussed of how your product or
service differs fro everything else on the market.
6. The market potential for your
service or product.
Remember that you've got to convince lenders, employees and others that the
market you're after is relatively large and growing. You'll need to do some
research for this section. If it's a locally based business, you need to
assess the demand for your offering within an xx-mile radius, based on what
you determine is a reasonable distance from your business. It it's a
Web-based business or a business that relies on both the Internet and local
traffic for revenues, you'll need to evaluate demand on a local and/or a
national basis. A research report from sites such as Forrester Research can
cost hundreds to thousands of dollars. But you may be able to get some
information simply by using the Web and its many search engines and
7. A Marketing strategy.
How do you plan to tell the world you're open for business? Will you reply
on word of mouth (not a good plan unless you've already got a reputation)?
Will you advertise in print, television or on the Web (or all three)? Will
you use online services to get your company listed on search engines and
advertised on other Web sites? You'll also need to include how much you plan
to spend on marketing.
8. A three- to five-year financial
All good business plans include a section that lays out the benchmarks
you'll use in deciding to call it quits. The strategy could be based on a
dollar figure, revenue growth, the market's reception to your idea, or a
consensus among top officers.
9. An exit strategy.
Some people may disagree with me here. But no speaker wants to be chatting
to a crowd that's busy reading a summation of her remarks. Unless it is
imperative that people follow a handout you're presenting, wait until you're
done to distribute them.