By Jennifer Covello
I still remember these words from the small business workshop facilitator when I was starting my own business. However, I also remember disagreeing with him (in my mind anyway) as he spoke of the importance of having a well-thought out plan for your small business. I knew he was talking to the other people who had no previous business experience. Clearly this was not me.
However, after leaving the class, I begrudgingly began to work on my plan. Hours later, I had several pages outlining why my products were unique and how they would change the world. A plan surely worth a grade of A-plus. Not so much.
As I learned, not only from this facilitator, but other experts, business plans are the vision of your business and the means for which you will carry it out. They are well-researched, rooted in fact, and contain the nuts and bolts about your business Grade for my first attempt? Maybe an “A” for effort, but a “D” for content.
I’ve learned that there are three reasons why small business owners don’t have a business plan. The first – “I don’t have time. I have to run my business!” The second – “I have no idea how to write a business plan.” And last– “I don’t need a business plan. It’s all in my head.” (Does this sound familiar?)
These three reasons have one thing in common. They are…how shall I say this nicely? Well, they are excuses. That’s right. Excuses. And excuses don’t grow businesses. They keep you stuck or worse, they keep you from ever starting. Does a business plan take time? Yes. Does it require effort? Yes. Can you do it? A resounding YES!
The first step in finding a solution to any challenge is to admit there is a challenge. I’m going to assume if you are reading this that you don’t currently have a business plan, but want to create one. Given that you have taken the first step, the next is to rid yourself of the excuses that are holding you back. Because if you really want to accomplish something, you will find the time, you will push through the excuses, and you will recognize that you may need help. You just need to decide to start. I hope the following information and tips will help.
While there are many templates available for business plans, having a few pages outlining the following key areas is a great start.
- Summary. An overview or snapshot of your business.
- Industry overview. What’s going on in the industry for which you will be doing business?
- Competitive Analysis. Who are your competitors?
- Financials. How will you make money?
- Management. How is your business organized?
It’s tempting to start with this section because it comes first in the plan. But it’s best to develop this last because it is intended to present the reader with a snapshot of your business. This is not a lengthy section. Three to four paragraphs are sufficient.
Your business plan is mostly for your eyes only. However if you’re seeking investors, you must write your plan as if they will read it. Remember, like anything that is read, if it doesn’t catch the reader’s attention in the first few minutes, they are not likely to finish reading it. So make your summary compelling but accurately reflective of your business offering.
This section contains information about the industry your business will serve. This should reflect not only a broad but a local view. Think of this as a “state of the state” for your business.
For example, if you are opening a gift store, you want to include data on the retail industry as a whole, but also data on local retailers. What are the challenges and opportunities? What are the predicted growth trends? This information can be gathered easily from free research available on the Internet, the business section of any library, and various industry associations.
That sounds scary, doesn’t it? I hear the word ‘analysis’ and the hairs on the back of my neck stand up. But what this really means is do you know who your competitors are? If you don’t have a good sense of who your competition is, how will you be able to make your products or services stand out among them?
Knowing who your competition is helps you differentiate your product or service and helps you to better serve your customers. New businesses start every day and so your competition changes every day. Staying on top of the happenings in your industry will be critical for your success.
Another section that can instill fear for some business owners. But aren’t you in business to make money? I mean, there are certainly businesses that are labors of love, but even they have to pay the electric bill!
So what’s included here? Simple. You make money by selling your products or services. In order to do that, it costs money. This section is merely a reflection of all of the ways you will make money and all of the expenses to do so. Yes, there are fancy terms for many of the financial statements you will need to include, like cash flows, income statements, and balance sheets. These are critical to understanding how your business will make money. But having a simple budget-like statement outlining where and how your money will be made and spent is a great way to get a sense of the financial picture for your business.
Basically this is the “who” and “how” of your business. Are you a sole business owner or do you have partners? What’s your business legal structure? What type of insurance do you have? What happens if the business closes or ownership is transferred?
This section addresses your business structure. You want to speak to a small business expert on the type of business you should set up and any insurance you may need to protect yourself and your assets.
And that is a business plan in a nutshell. Not too bad, right? Your business plan is not something you write once and file away. As your business grows and changes, so should your business plan. Take it out regularly, evaluate it, and determine if it needs to be updated to reflect your progress. While a business plan is a serious document, it should also tell a story. And like any good story, you want a really good beginning, lots of detail about the characters, and a great ending.
As we approach a new year, what better way to develop your business plan or take your existing plan out of the file cabinet and look at it with a fresh set of eyes. Start 2015 off with a bang!
This is my last Market Mommy blog post. I am grateful that I was given the opportunity to share my experiences and lessons learned in this forum. I hope you have benefitted from my posts and that your businesses will grow abundantly in the new year and beyond.
Jennifer Covello is The Purposeful Parent, an award-winning author, blogger, motivational speaker, and creator of Frittabello baby gifts. With her unique perspective on parenting coupled with her sense of humor and vast experience, Jennifer is able to relate to a variety of working women and the daily challenges they face like “SuperMom Syndrome”.
Jennifer has been featured on both radio and TV programs for her insights about her journey from corporate “cubicle dweller” to “mompreneur” and back again. She provides inspiration for all parents to help them succeed at the most important job they will ever have.
Jennifer is a native of Long Island, New York and had a corporate career in IT and Marketing. She holds a B.S. degree in Management Information Systems from Indiana University of Pennsylvania and an MBA in Marketing Management from Pace University, New York.
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Linked In: linkedin.com/in/jencovello