Introduction

It is hard to take a business seriously when there is little or nothing in writing about its structure, future direction, or position in the marketplace. That is why a business plan may be the most important document you will ever write for your business.

Simply stated, a business plan is a written document detailing the operational and financial aspects of your company. Like a road map, it helps you determine where you are, where you want to be, and how you are going to get there. If it is well written, your business plan will keep you in touch with your goals, potential risks and probable rewards. Moreover, it may be the crucial factor in convincing investors or company management to give you the financing you will need to realize your dream.

Whether you are seeking a loan, looking for an investor, soliciting management or simply using the business plan to manage your business growth, the ideas, exercises and discussions contained in this course will provide the structure to write a business plan designed to steer your company into long lasting success.

This course is deliberately designed as overkill for most businesses. That is good because you have plenty to work with. It compels you to think through many different possibilities for building your business beyond your imagination. There is nothing “cutesy” or “full-of-fluff” about this course. There is, however, a series of practical exercises to assist you to quickly produce a plan of action – from a brief 10-15 page proposal to a comprehensive 40-50 page operating plan.

Remember, your marketing and sales strategies are what substantiate your financial projections. The Market Analysis and Marketing Plan sections make the difference between a “blue-sky” proposition and a viable business worthy of a solid investment.

Be sure to read the introduction before starting in on your plan. It is a brief reality check on writing business plans. It is years of wisdom crammed into a few pages and it makes a lot of sense. You will become a smarter, more effective business person because you will successfully complete this important project, and enjoy more time for other priorities.

Why Write a Business Plan

The first and most important benefit of a business plan is that it gives you a path to follow. A plan sets the stage to make the future what you want it to be.

A plan makes it easy for your banker to be in on the action. By reading or hearing the details of your plan, your banker will have real insight into your situation to determine if or how much to lend to you. Likewise, potential investors can review your plan to gain a better understanding of your business and to determine if their investment is worth the risk.

A plan can be a communication tool when you need to familiarize sales personnel, suppliers, and others with your operations and goals.

A plan can help you develop as a manager. It can give you practice in thinking about competitive conditions, promotional opportunities, and situations that are advantageous to your business. Such practice over a period of time can increase your ability to make wise decisions.

A good business plan saves you money and time by focusing your activities, giving you more control over your finances, marketing, and business objectives.

Twelve Steps to Complete Your Business Plan

This outline will give you an idea of what will be covered in the class, or, if you want to write your business plan on your own, it can serve you as a guide to what must be covered in your business plan.

1. General Company Description: This statement will provide a “big picture” perspective of the industry to which your business belongs and prepare the reader to better understand how your business fits into the total picture. It includes the industry background, growth potential, new products and developments, economic trends, industry outlook and forecast, a profile of your business, a profile of the specific market, anticipated challenges and planned responses.
2. Present Situation: In this section, you define clearly how you have come to your current position. It includes the current market environment, present stage of your industry, product life cycle, pricing structure, present status of your management team.
3. Objectives: In this section, you will develop short and long term goals. Here is where you formulate a vision of where you want to be in a few years. Make sure that you balance enthusiasm with realism. In order to achieve your goals, set a few simple objectives for each year, first through fifth.
4. Product/Service Section: Will your product/service be easily recognizable and understood by lending/investing organizations? It is important to identify your product and/or services clearly and explain all aspects of purchasing, manufacturing, packaging, and distribution. Potential lenders and investment groups will lend capital only if they have confidence that the business concept has been clearly researched, identified, calculated and thoroughly thought out.
5. Market Analysis: Do your homework! Have you clearly identified your market? This includes competitors, market share, potential market share, market stability, growth, success of your product and/or service in other markets. You would be wise to include supporting documentation from third party independent sources such as magazine and newspaper articles, books, trade reports, government statistics, and surveys.
6. Marketing and Sales Strategies: We have all seen great businesses, with a superior location and a unique product, go broke and close their doors. In most cases, this tragic problem can be traced to poor marketing and promotion. The four essential areas to investigate are: publicity, promotion, merchandising, and market research.
7. Management Section: Do you know what “ploc” is? It is a mixture of hair and tar used to cover the bottom of a ship. Without it, a ship is at best unstable, at worst, the Titanic. Likewise, your management team is responsible for the success or failure of your business, and the key deciding factor on receiving the desired financing you seek. Make sure your management team excellently covers your PLOC: Planning, Leadership, Organization, and Control.
8. Financial Projections: In this section, we will develop a set of financials that will include Profit and Loss statements, Balance sheets, and Cash Flow Statements. Presenting potential lenders or investors with a set of financials is meaningless if they are incomprehensible to you. Therefore, before you dive in and begin crunching numbers, become familiar with the financial statements. This section should also include an implementation schedule for the finances, and a statement of resource needs (how you will use the funds).
9. Executive Summary: The Executive Summary is that critical portion of an effective business plan, examined first by investors, yet completed after all other sections have been composed. By preparing this section last, you will be able to write it more easily and with greater impact, since you will have already compiled your data in other sections of your plan. Simply transfer the “sizzle” of your plan into concise paragraphs that become your Executive Summary.
10. Appendix Section: This is where all your backup documentation is compiled, to include: letters of reference, your company brochures, mechanical designs of your product, contracts, media information, surveys, articles, clippings, special reports, charts and graphs referred to in the main text, glossary of terms, management biographies, etc.
11. Practical Tips:
    • Be realistic: Your business plan should be a carefully crafted, practical document, geared towards performance, not a speculative piece of fortune telling.
    • Document your claims: Assemble and apply expert opinion to substantiate your projections. Use sources such as newspaper and magazine articles, university studies, and interviews of prominent people familiar with your market.
    • Create a Unique Selling Point (USP): If you have a competitive edge, use this advantage boldly. Make it y our selling point and direct your consumers to associate their needs with your USP at the expense of the competitors.
    • Be flexible: Your business plan, your “road map”, allows you to check your position, velocity, and direction, while keeping your objectives in mind. As you monitor your progress, you will periodically need to implement mid-course corrections, or as your assumptions are updated according to “real life feedback”.
    • Use technology to your advantage: Use a business plan writing software, an office suite that allows you to draft documents, and create scenarios for your financial portion. If you are already on this site, you know how valuable the Internet can be in increasing your knowledge base and creating community with other entrepreneurs.
    • Attend to packaging: The business plan should be clean, conservative, simple, well-prepared, clearly written, error free and appropriately bound. Your plan should look impressive, not slick. Let the visual form reflect the quality of the content.
    • Present the business plan skillfully and graphically: You can use projection technology when presenting your business plan to prospective funders. Presenting economic and chart-oriented information in an attractive visual way helps to solidify your position. It also speeds up presentations, makes important facts quickly accessible, and reflects well on your ability as an effective business manager.
12. Get Funded! Know where to look for funding, and better still, determine the purpose of the money you seek with the funding source for a long, rewarding, and profitable alliance.

Make sure your management team is in alignment with the work you’ve completed on your business plan. In fact, let the business plan design be a team effort. Then, when you have it in as final a format as you can get it, send it out for peer review to SCORE (Service Corps of Retired Executives), your local SBA office, or a Small Business Development Center (usually associated with a local college or university). These folks have experience with business plans and can provide the expertise necessary to fine tune it for funding success. You can also outsource your project to a consulting firm such as ours. We have written over 23 business plans with a 80% funding success rate. Contact me at monikah@ogandoassociates.com for further details.

Lessons

Click here to see course syllabus