Stop Sweating a Business Plan

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Writing a business plan becomes a major stumbling block for many new entrepreneurs. They read all the articles, books, blogs, and other drivel about importance, formats, contents, “do this–don’t do that” stuff, and then stress out about writing a formal business plan.

If you are someone worried about writing a formal document…consider this:

“I have always found that plans are useless, but planning is indispensable.” –Dwight D. Eisenhower

The point I want to make here is that for the great majority of the 6+ million new businesses that will startup this year…a planning “document” is not necessary and is a waste of resources. At the same time, however, “planning” is absolutely necessary for every single one of them.

Having said that, I am well aware that if you are expecting to start a high-tech company to knock off Google or Facebook, you will need lots of venture capital, and VCs require a very formal and expansive business plan, as well as a top-notch presentation (should you get that far).

But these “darlings” of the startup world are only a small percentage of all the businesses that will be created this year (and every year). If you are reading this article, and hoping to start a business, it is highly unlikely you will need to write a formal business plan.

You will, however, need to do some pretty detailed, “planning.” The purpose of this planning is to develop a fairly detailed strategy that you will continually modify as you move ahead.

Here is what you need to include in your strategy planning:

1.) A Strategic Outline. You need to understand what your strategy is going to be to build your business. This outline only needs to be complete enough to manage your business–no one else (other than your advisors) is likely to every see it.

2.) Work Out the Basics. You will need to clearly understand your market, and do whatever market research is necessary to accomplish that. You will also need to develop forecasted revenues, and detailed expense estimates…both to start your business and to operate it. And, of course, the most important of all-you will need to determine how much money you will need to start your business.

3.) Use Your Resources. You should have an advisory board, or group, assembled to assist you through this planning process. A good advisory board can mean the difference between success and failure of your business–so use them, especially when planning your startup.

4.) Never Stop Planning. The less formal you make your planning, the easier it will be to make frequent changes to it, based on your on-going experience with the business. Updating your planning frequently also provides the opportunity for you to review your thinking and see how that has changed since you first started.

So, in essence, don’t sweat the thought of writing a mighty tome about your business idea (unless you are looking for venture capital), but be sure to do a thorough job of “planning” your business. Remember, you are always planning, and how you record your business planning is strictly up to you. Cocktail napkins, whiteboards, butcher paper, etc., are all fine.

Writing a Business Plan

If you are in the process of starting a business or considering expanding an existing business, most advisors, and books written on the subject, say you must have a Business Plan. You may be doubtful given that it means you need to take precious time out of your busy schedule to put your plans on paper.

But do you really need a Business Plan?

A survey carried out on 400 UK entrepreneurs by SimplyBusiness revealed that 54% of business owners don’t have a Business Plan. Shocked? I was. Based on my experience when dealing with both start ups and seasoned business owners I thought the figure was on the low side! Only 54%?? Come on. I can count on one hand the number of business owners who have a Business Plan.

So, is a Business Plan as essential as we’re led to believe? Can you build a business without one?

What’s the Answer?

The simple answer to these two questions is… yes.

Yes, a Business Plan is essential; and yes, you could still build a successful business without one, but the unknown aspect is, could you have been even more successful if you had written a Business Plan?

You’ll never know but perhaps now is the time to think again.

Perhaps you are not sold on the idea that all the effort required to prepare a plan is worthwhile. If this is you let’s consider 5 key benefits for you and your business.

Feasibility and Viability

Taking time out to write a Business Plan will assist you in assessing the feasibility and viability of your idea. You may assume that sitting back and planning your future empire in your head is going to cover all the aspects of your business. Maybe, but the process of writing your thoughts down on paper will bring to the fore all the risks and potential pitfalls you hadn’t thought of. A Business Plan forces you to put your ideas down in writing and in an orderly manner. The result of this could be you going in the opposite direction or even dropping your idea altogether. Not a pleasant thought, but which would you prefer? Losing your capital or the chance to re-consider your idea?

A Measuring Tool

A Business Plan is an ideal means of monitoring your progress against the objectives you set yourself. By checking the progress you are making against your Plan you’ll be able to quickly identify if you are drifting from your original vision; know this and you will be able to take corrective action.

Consider if you didn’t have this check in place; a slight change in direction, if not spotted or left uncorrected for too long, could be damaging to your business. On the other hand, it may be that a swing from your original vision would be a more profitable alternative, one which may not have come to mind before. At least with a Business Plan you have given yourself the choice.

Get the Numbers Right

Do you really know with 100% certainty how much money you’ll need? Have you covered all the possible financial eventualities? It’s difficult to answer yes to this question if you don’t have a Business Plan.

A Plan will challenge you to consider whether you have the correct amount of funding needed to make your idea work. You may have a rough estimate of the funding you require, but until you prepare your Financial Forecasts you may not realise that a few extra thousand is needed.

Helping to Get the Bank on Your Side

One of the key reasons why banks don’t support requests for finance is lack of information. If your manager doesn’t have a good enough ‘feel’ for your idea or business then you are giving the bank every reason to say no.

A Business Plan will make the bank feel much more comfortable about the risks they are being asked to take. Without information to balance out the pros and the cons it would be easier for the bank to say ‘no’ and move onto the next request. By investing time in preparing a plan you are improving your chances of success of getting support from your bank.

A Business Plan Can Say it Better Than You Can

Not everyone has a smooth way with words and sometimes even the best communicator’s need the back up of the written word. No matter how good a presenter you are, it’s unlikely you will be able to convey your vision as clearly as a Business Plan. Too often a business owner will try to sell their idea to their bank or a potential investor and at the end of the session the manager is none the wiser than he was at the start. A Business Plan leaves little or no room for misunderstandings.

You should now realise that it’s essential to have a Business Plan; it may be the difference between success and failure! It’s all about understanding the importance of planning ahead. Invest time putting your plans on paper because it will pay you dividends in securing the funding you need and the future success of your business

Writing a Small Business Plan

For many first-time entrepreneurs, writing a small business plan has enabled them to effectively manage the business time. Entrepreneurs running small businesses are usually overwhelmed by the processes since they have total responsibility for the running of the business. Therefore, a mechanism to organize the tasks will increase productivity and allow you as the entrepreneur to stay cool and collected.

Writing a small business plan is not exactly the ‘time-management mechanism’, but it will ensure that the components of the business are run systematically. These components include, among others, business operation plan, management plans. As a concept of its own, time management is considered a myth. The idea behind time management is the concept of effective planning. Therefore, to manage the business time, you need to plan how the business will be run. The easiest way then, is by writing a plan for a small business.

As a rule, the plan should reflect on the main focus of the business. A good business plan can be obtained by contracting a variety of business plan writing services. The business writing services usually provide a guideline for the plan and will ensure that it will define all the sub-systems that form the business structure. Therefore the problems that will arise at any section will therefore have their solutions, and these solutions will be reflected in the plan.

The solutions are the tasks that will be carried out so that a particular goal is reached. Therefore, writing a small business plan is essentially a way of listing down all the tasks that will be involved in the day to day running of the business. In the process of writing a small business plan, business policies will be developed in the operations section (which describes the operational activities involved). The policies will then determine the daily schedule of the business. If a business consultant was the business plan writing service provider, then they will provide vast information on how a particular business can be effectively run and the best ways to have the tasks carried out.

Writing a small plan for a business will also help in the structuring of an effective management system through management planning. Effective management involves an effective human resource planning system. This therefore will determine the delegation of these tasks. By evaluating the way the tasks are delegated, you will be able to assess which tasks you can accomplish as the entrepreneur, and which tasks will involve hiring help. Depending on the budget, the hired personnel could be full-time, part-time of freelance workers.

The types of hired personnel will depend on whether the tasks are general, technical, repetitive or periodic. By being able to decide on which tasks can be accomplished by which personnel, it is possible to effectively acquire the people skilled in these tasks. Therefore, each task will be effectively sorted as long as the business is running as planned, and any unseen problems will be much easier to deal with.

Seven Step Business Plan

To be successful in business, you need to conduct research and write your business plan. Attempting to start a business without a (well-composed) business plan through feasibility study is like a stranger going to an unfamiliar terrain without prior direction. Or better still, it is like a ship without a rudder (which controls its direction). It is in the light of this that the publication of this text entitled “Seven Step Business Plan”, written by Ms. Sheila Holm, a respected business-management expert is a welcome addition to business management literature.

Holm says before preparing this text, she had cycled and recycled clients to every bookstore to work through every business-planning book option. She adds that the clients purchased many books but still wanted more help. Holm discloses that to make it easy and affordable for more business owners to receive help, she started conducting a series of seminars to help owners and their management teams develop their business plans within a seven-step format based upon their dreams and goals.

Holm says the outline of the seminars developed rapidly into a seven-step, one-page form for quick and easy review while updating the business plan according to each change and adjustment to the goals.

The author educates that having a business plan adds value to the bottom line of a business. She adds that this text removes the learning-curve requirement, stressing that she knows you can increase the productivity and profitability of your business when you write your own business plan.

Holm says whether you have not yet written a plan, you have paid a consultant to write a plan, or you have proceeded with your business idea before writing a plan, you are absolutely in the majority. She submits that the truth however is that no other owner, director or team leader can articulate your business idea better than you can, stressing that planning is the key to success and profitability.

Structurally, this text is segmented into seven chapters. Chapter one is entitled “structure”. This author educates here that immediately in your own words, you should begin writing a statement about “how it is around here” according to how you are going to proceed with your business. Holm says many owners, even after they open the doors and operate their business, proceed without a clear statement about their business: how it will meet the needs of customers or how their business relates to the industry. The author adds that their dreams and goals are not in writing or in focus yet.

She stresses that clarity is helpful and has a positive impact upon your bottom line. This author adds that if you want more profit, then you need to gain clarity and if you want more clarity, then you need to schedule a little more time to walk and/or work through the planning process with her.

According to Holm, businesses develop in phases, so it is important to begin the planning process by identifying the part of one or more phases, or stages of development, of the business process your business represents. The author discloses that your business may be at a point where you want to add a phase to your existing plans or it may be an idea that you want to sell to someone else. You may want to purchase a developed product in order to market and distribute it, or you may be starting a business that will include all phases of the business process, expatiates Holm.

She says this stop is a major decision point since it will match your expertise and passion with the type of business you should pursue. In her words, “So, take a moment to get comfortable and get a firm picture in your head of yourself as the owner of the concept or product in one or more of the key phases of the business.” Holm also discusses idea; development; location; production; marketing and sales; distribution; and repairs or redevelopment in this chapter.

Chapter two is based on the subject matter of placement. Here, the author says the biggest mistake owners make is to think they have the most unusual business idea. Holm stresses that she is always concerned when a client says she should hurry up and develop a business plan before someone else steals the idea.

She reveals that ideas are out there and we do not have the market cornered on any idea. The author adds that only very few people with ideas will proceed and develop the ideas into a tangible entity, a business that will become part of the marketplace. She stresses that you are the exception to the rule.

The expert submits that now that you have set out to pursue your idea, it is important that you continue to follow and recognise the needs of the market that initially inspired you. She explains that if you understand the placement of your business within the industry, it is as important today as it will be that every day you are in business.

In Holm’s words, “Too many businesses forget to stay current regarding the trends within the industry and the business, market in general. The business process is a fluid process, so do not plan on making a decision regarding placement and then setting your business idea into a concrete base and forcing it to hold up to this statement for more than a few weeks. This is why I absolutely recommend reviewing the Seven Step Business Plan form each month.”

She illuminates that this phase of planning your business is a good time to meet and interview experts. On the aspect of customers, Holm says if you think everyone is your customer, take a second look at the facts about your business and what it will provide to the community. The author educates that defining your customers will assist you in the process of matching your business with the top competitors in your industry She adds that you have to know your competitors and how they are doing business within your industry.

“Begin with the title ‘Competitors’ on a page of your notepad. Add names to your list each time you identify a business in your industry. Expand your list and add all related businesses, increasing the scope and parameter of your search. This list will also help you gain an objective view of how the various businesses affect your business and your industry,” educates this expert.

Chapter three is on the concept of leadership. Holm says the most important statement you can make about your business is the statement you make about yourself and your involvement within each phase of the business. She adds that the statement you make about each member of your leadership team closely follows the importance of the statement you make about yourself.

According to this author, your leadership ability is critical as it is your ability to inspire others. Holm emphasises that leadership skills and abilities develop into the team strengths that are going to be evident in the business structure and help sell the business to each customer, vendor, employee, and business. “Remember, you are not able to be all things to people within the team. Each leader plays a specific role, and the team’s strengths and support in areas of weakness will define the overall strengths of the business,” guides the author.

The business management expert educates that when you detail your involvement, you should ensure that you align your statements with the phrases you have written to describe your business today and your plans for the future of this phase of the process. She adds that this statement will need to remain flexible in order to complement the plans for each aspect of the business as you continue to refine them.

In chapters four to seven, Holm analytically X-rays concepts such as purpose and highlights; vision and mission statements; operational and marketing plans; and financial and profit plans.

As regards stylistic assessment, the report card of this text is in blue. For instance, a lot of textual and graphical illustrations are used to reinforce the understanding of readers. The book is also very educative in that the chapters are further broken down into many sub-segments to achieve simplicity and easy comprehension on readers’ part. Holm includes one-page fill-in-the-blanks form representing a prototype for a typical business plan to guide readers. What’s more, the language is simple.

However, a technical error is noticed in the text. This is the omission of a hyphen in-between the first two words of the title of the text “Seven Step Business Plan”. Omission of the natural hyphen has grammatically deprived “Seven” and “Step” from becoming a nominal compound modifier to the phrase “Business Plan”. It is structurally supposed to be “Seven-Step Business Plan”. Without a hyphen, one will also be grammatically compelled to add an “S” to “Step” because of the cardinal word “Seven”.

On the whole, the text is a necessary companion for (prospective) entrepreneurs, business managers, etc. What else would you expect me to say if not that “it is highly recommended”? Get a copy of this book today and learn how to write a business plan so that you can achieve business can succeed.