THE BUSINESS PLAN, PART ONE
Each of my past nine articles has been building up to this point: creating your business plan. Most people think of business plans as something that new businesses do; however, there is nothing preventing any business from creating a business plan. In fact, if you own an established business that is not currently following an up-to-date business plan, then it would behoove you to write one up. After all, the business that fails to plan, plans to fail.
I strongly suggest purchasing business plan software unless you are skilled at writing business plans and/or have a qualified person helping you. My personal favorite is Business Plan Pro by Palo Alto Software, Inc., which is located in Eugene. The time and hassle savings are well worth the nominal cost.
Begin your business plan by outlining your goals, your victory conditions. Achieve these victory conditions and youll be able to call yourself a definition. Remember to always think in terms of yourself and the lifestyle you want to have. Your businesss one overarching goal is to contribute to your life, never the other way around. Describe how you will achieve those conditions in terms of the companys driving principles or mission. Finish your introduction by listing the conditions that your business must have in order to succeed. This could include parking, licenses or certifications, location, employees, anything.
Next, talk about your company. Who owns it? How is it structured (sole proprietorship, LLC, corporation, etc.)? If there is more than one owner, who owns what percentage? How much will it cost to start up (and arent you glad you figured out how to get up and running with the least possible expense)?
What exact products and services are you selling? Where do you get these items? Do you manufacture them or order them from manufacturers, distributors, or wholesalers? What mix of products and services do you offer and why? Do any special risks exist in your supply chain (such as if youre heavily dependent on an individual artisan for some of your core offerings)? What ideas do you have for expansion?
Who exactly will buy what you sell and why? How do your ideal customers break down into tight groups that you can easily nanocast to? Why did you select these target groups? What is the current and projected future status of these groups? Each group of customers is called a segment. What segment(s) does your business target? Why are these groups important? How many people are there in each segment and what percentage of each do you think you can capture? Why?
Who are your competitors? What about potential allies or fusion marketing partners? How many similar businesses are operating in your market space (physical or virtual)? How do they sell their wares? To whom do they sell? How much business do they do? How stable are they? What are their competitive advantages vis-� -vis your own offerings? What makes your business special and why?
These are just a few of the many topics youll need to cover in your business plan. Now do you see why its taken me so long to reach this point? If youve been following along since the beginning, then you should have most of these questions answered or at least know where to find the answers. Part of this exercise involves taking research thats been very you based (your goals, your dreams, your lifes mission) and translating it into a document that banks, investors, and others can read and understand.
Translating your business plan into a seemingly straitjacketed format accomplishes two goals: First, as mentioned, banks and others can read and understand what youre up to, which will help immeasurably when seeking funding, leasing a location, working with professional advisors, and much more. It also helps you organize all of your research and see it in a totally different light, which can help you spot weaknesses before you commit to expending large sums of money or time.
Well continue discussing business plans in my next article.