Business Plans / A Summary

THOSE WHO FAIL TO PLAN, PLAN TO FAIL*.

*but those that spend all their time planning instead of doing will fail just as badly

The dreaded business plan. These two words can induce screaming, wailing and gnashing of teeth in the most relaxed of people. Not to mention some of the most severe procrastination you’ll ever see in otherwise hard working individuals. It’s not that bad. I won’t claim Business Plans are fun, but they are invaluable.

But before you start, understand what a business plan should and should not be. It is not an all-encompassing epic that charts ever minute of your company’s life for the next 5 years. It should be a roadmap and compass for the direction your company is going in. It’s a reference that clarifies the assumptions behind your business and how you intend to execute whatever you plan on doing. Use the plan as a reality check and a reminder of what you had in mind when you started the business.

The main purpose of a business plan is to make you think about your business and clarify your ideas.

Business plans are not carved in stone. Chances are that your original concept is some distance from what your business ended up being. So update and change the business plan. The important part is that by documenting what you are going to do and how you are going to do it you can see how changes will impact what you are doing. If a fundamental assumption has changed, chances are that some steps in your execution will need to change too.

Focus: Since you have limited resources available, you have to focus your efforts. Creating a business plan will make you focus on what you are trying to achieve and how you will do it. If an idea doesn’t make as much sense when you lay it out on paper, change it.

Capital: If you need start-up capital, you’ll need a business plan. You need to be able to show that you know what your company will do and how you will get it going.

Key Decisions: Throughout the life of your company, you will make key decisions that fundamentally affect the future and nature of your company. A well thought out plan of action that you can readily refer to can help you avoid making bad decisions. A startup is usually a crazy working environment and you may honestly forget why you rejected a particular idea when you started the company. The business plan should help remind you, or make you realize you were wrong initially and need to revist other assumptions too.

Calming your banker: As a small company you will make your bank nervous. A good business plan will go a long way towards helping him/her sleep at night, and more importantly, help convince them to back your business.

The plan should set goals and objectives for your company, including how you plan on meeting them.

A good plan should be:

Meaningful: When met, your outlined goals and objectives should really impact your business.

Realistic: Don’t daydream in your business plan. Keep it real.

Measurable: Quantify your expected results so that you can measure your progress.

There are a ton of books and online resources for writing business plans. Start with the Small Business Administration (SBA) at http://www.sba.gov/.

The best place to really begin is with the Executive Summary. This should be a short and meaningful overview of your business that lays out all of the elements key to your success.