How To Write A Business Plan
By Tom Egelhoff
 If you are a regular of this site then
you know my feelings about business plans. I don't believe you
can have a successful business without one. The business plan
keeps your business on track and forces you to look at aspects
of the business that may not be your area of expertise.
For example: You are probably not an accountant nor have you
kept a set of business books before. You probably don't know
how to project what your business will be like in the next two
to five years.
These are things that the business plan will show you and
give you goals to work toward. Don't worry for the moment if
you don't know how to do the things I mentioned above. I'll show
you where to find free help to do those later on in this article.
The plan will also help you overcome bumps in the business
road because you will have a course of action already defined
to deal with those situations. The most important part of the
plan is that is will set goals for your business. If you don't
know where you want to take your business how can you hope to
make decisions to keep your business on track to reach those
goals.
But, before you begin to construct your plan there are some
things I should point out that will help you along the way.
This is
your plan not a bank plan
The first time many businesses find they need a business plan
is when they show up at the bank looking for financing for their
new business. Then they rush out and write what they think the
bank wants to hear.
As a result they may get the money and get the business started
but the plan may not be the best plan for the business. I'm sure
Bill Gates didn't explain the Microsoft® he saw to the bankers
because they would never have believed him but I'm equally sure
he had a very exact plan for where he wanted to take Microsoft®.
You are going to need more than just the business plan to
sell your idea to the money boys. They are going to look at the
plan make no mistake but they are also going to take a look at
you and decide if you are the kind of person that can carry the
plan out. Before presenting the plan know it inside out.
New ideas
are not necessarily good
Can you imagine the uphill battle for the first salesman to
go out and peddle "sour cream?" "You put in on
baked potatoes and it tastes great?" "Oh, yeah what's
it called?" Would "sour cream" sound really appetizing
if you were unfamiliar with it. Yet it's as common today as birds
in the trees.
New ideas require education. Don't forget to include the cost
of additional advertising to educate the public about your product
and how and when to use it.
Where can I get free help if I need it?
If you want to start a woodworking business there probably
isn't a lot of things I can tell you about wood. That knowledge
is the strength that you bring to the business. But you will
need some help with the areas you are weak in.
For most people that is the part called the financial. Cash
flow, sales forecasting, profit and loss statements and income
statements to name just a few. Where do you find out how to do
and understand these.
Here are a couple to start with:
S.C.O.R.E. (Service Corp
of Retired Executives - Usually tied to your local chamber
of commerce. These are retired successful business owners and
executives who give free business advice. They can also help
you create your plan. If you are going national or international
contact a chapter in the nearest major city. They will usually
have more experienced people. For small town retail or home based
business a small town chapter would be better. Click the link
above for the chapter nearest you.
Small Business Development
Center - Many small towns and cities have a SBDC office
that offers courses in business planing and other business information.
They also have free consultation available.
Other sources of information can be found at your local public
or university library. For more on this see How
And Where To Find Small Business Information
Your plan
will have many parts
I don't think I've ever read a book that wasn't divided into
chapters or sections. You business plan will be similar. Here
are some of the things that will be contained in a basic business
plan.
Business Plan
Statement of Purpose - Why are you starting this business?
Business Information - Who, why, where, when, how?
Personal Financial Statement - Are you responsible and reliable?
Description of Business
Personnel - Who will work there and what is there expertise?
Organizational chart
Job descriptions
Resume
Marketing Plan - Roughly 30% of your total plan will
explain how you plan to market the business.
Market Analysis
Market Research-Product
Environment and Industry Analysis
Competitors
Consumer Markets
Business Markets
Characteristics of Your Target Market or Customer
Marketing Mix Strategy
Suppliers
Financial Plans and forms - How you plan to handle
your money.
Financial
Uses of Proceeds - How will the money be spent
Start Up Costs Worksheets - S.C.O.R.E. can help with this and
the ones below.
Projected Profit and Loss Statements (3 years)
Proforma Cash Flows (3 years)
Projected Balance Sheets (2 years)
Break-even point
Keep Your Plan Up To Date - for the first five years
you may revised your plan every few months.
Business Checklist - Some
other things you should look for before going into business.
Executive Summary - Your vision of the business.
The above is a plan outline for a small business start-up.
For more detail on how to do each topic; click
here.
The last
word on what you should know before you write a business plan
You're excited about your business. It's ready to take off.
The best advice I can give you is to be optimistic but not overly
optimistic. You are going to have to be able to present this
plan and defend it if necessary. So don't embellish any facts
that you aren't prepared to back up.
I can't overly stress how very important a business plan (any
form of plan) is to the success of your business. A pilot flying
from New York to London can't see the destination for 99% of
the trip. He relies on a flight plan. A business plan will get
you where you want to go if you prepare it correctly and follow
it to the letter.
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This
article may be reproduced for your non-profit group or organization
provided it is not altered in any way
and the following is attached:
Used With Permission
©2000 - 2002 Eagle Marketing PO Box 271 Bozeman, MT 59771-0271
http://www.smalltownmarketing.com - (406) 585-0219
email: tommail@smalltownmarketing.com
Based in Bozeman, MT, Tom Egelhoff is the author of How To Market, Advertise & Promote Your
Business Or Service In A Small Town, and The
Small Town Advertising Handbook: How To Say More And Spend Less.
He is also a seminar and workshop presenter
and trainer. He may be reached at 888-550-6100 or PO Box
271 Bozeman, MT 59771-0271
Would
you like Tom Egelhoff to speak on business plans
at your business function or convention?
Click here for
information, topics and pricing.
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