Success in business is no accident.
Ok, so everyone knows someone who launched a business on a whim; has flown it by the seat of his pants; and – far from going down in flames – has been wildly successful. Yes, it happens. But it’s not the norm.
Your business startup should be much more thoughtful and planned.
Any consultant worth her salt will tell you that a detailed, written plan is essential to your success – not just at startup but throughout the life of your company.
Whether you’re thinking about starting a business, you’ve recently launched or you’re a well-established company, a business plan is always a good idea.
If you’re in the exploratory stages, a plan can help you decide whether it’s truly feasible (or even desirable) to take the next steps and invest more time and money in your startup idea.
If you’ll need financing to launch or expand, a business plan that contains financial projections three to five years out is an important tool for convincing banks to lend you money or for raising capital from outside investors.
If your company’s already established, a business plan provides a sense of direction and a detailed operational plan. It’s an important management tool for setting expectations, monitoring growth, and charting future direction.
It's important to know, however, that a business plan is NOT a guide to entering a particular line of business or a particular market. Instead, it’s a guide that shows how you’re going to be competitive in that business or market, how you’re going to succeed.
Right about now you may find yourself irresistibly drawn to one of those fill-in-the-blank, one-size-fits-all, business plan templates you can find online, hoping to take the work out of the process. They are precisely what you don’t want.
If dread is beginning to eat at you like a school of piranhas, relax. You don’t have to pen some epic volume akin to War and Peace with projected sales, revenue, cash flow, expenses, and profits. Size doesn’t matter so much. It’s the thought you put in it that counts.
So, where do you start? Business plans should always be tailored to the specific circumstances of any business venture. We’ll break down the elements next week, but here are some basics that most every business plan contains.
Also called the executive summary, this is your business is a nutshell, a concise overview of the key elements of your business plan, placing special emphasis on your strengths and how you will make the company succeed.
Also called the company description, this section provides basic background about the company, its organizational structure, what you do and what makes you stand out from your competitors.
Provides a detailed description of product or service lines, including the importance of each to the company.
If you’re seeking financing, this section describes the project, its purpose, its cost, and the amount, form, and use of financing.
Details the principal management and non-management owners, areas of expertise, and outlines key management responsibilities and employees.
Also called the market analysis, this section describes the industry and industry outlook, identifies principal markets, major customers and competitors.
Is your product in the idea stage? In development? Ready to market? This section lays out the technical details and includes important patents, copyrights, and licenses.
This section spells out how you will produce and deliver products or services. It includes descriptions of your plant, equipment, and labor supply.
This section lays out detailed financial projections, provides essential financial documents, and identifies key advisers, including auditor, legal counsel and bankers.
As you think about these essentials, remember this: Your planning is meaningless if you don’t put it into action. Review your plan regularly, at least once a quarter. Revise it as business conditions change.
Consultants at our Small Business Assistance Office can help you understand more about business plans. And our network of Small Business Development Centers has experts located in nine main regional offices and several satellite centers statewide.
Our Guide to Starting a Business in Minnesota provides a detailed look at this and other important issues.
See this information, Write your business plan, from the Small Business Administration.
