Writing a Business Plan for Your Small Business

Before I embarked on the adventure that is entrepreneurship, I had worked exclusively fornon-profit organizations. From public schools to anti-poverty agencies to my years as a Peace Corps volunteer, my professional goals were never financial as they are now. Still, I learned a lot about setting goals, planning, and accountability in the work place. When I started my career, back in the glory days of human services, I was trained extensively in writing mission statements, vision statements and action plans. Since most of my positions were grant funded, I was also held accountable to our funding sources, through monthly reports whose accomplishments were supposed to closely reflect and align with our goals. I am grateful for what I learned. Even as a board member on my local YWCAand a trustee on my condo board association, I am held to these same practices of accountability today. I am not sure how I missed this point entirely when I was starting up my business.

Writing Your Business Plan Luckily I have access to my local Small Business Development Center where I attend their free training sessions for small businesses. This week I attended a session entitled Your Business Plan: Soup to Nuts. Since I am three years into my small business and have never written a plan, I was particularly relieved when the speaker opened by assuring everyone in the room that even if you are already up and running, you can still write a business plan. Phew! She continued by reminding us how important it is to continue planning and reevaluating your plan on a regular basis.

Some of the key reasons you need a business plan.

To validate your business concept;
To act as an internal operating document;
To prepare financial forecasts;
To promote business relationships
To seek finances and other support;
To be able to see clearly where you are going as a business. The speaker mentioned reminded us, “If you don’t know where you’re going, any road will get you there.”
To be able to best direct your business, especially if you are not, like most of us, skilled in all three areas of business management: operations, marketing, and finance. (She recommended attending workshops, taking classes and reading the book E-Myth Revisited in order to broaden your skills in these areas.)

Successful plans have the following qualities

Well written;
The writer believes and is committed to the plan;
The writer has time and energy to commit to the plan;
Realistic expectations;
Measurable goals and timelines;
A Plan B in case of unforeseen challenges or opportunities.

(This Plan B idea, and specifically the idea of remaining flexible and open to new opportunities, reminded me of the story I once heard about William Wrigley, Jr. So well known for Wrigley’s Gum, he had started out as a soap merchant, but found that the gum he offered as an incentive to sales became his strong suit.)

A good business plan should have the following components:

Outline:

Statement of purpose – why are you starting this business?
Business name and address;
Form of organization – legal entity;
Why was the plan created?
Capture reader’s attention;
Highlight strengths;
Explain why the business will succeed ;
Describe service or product your business provides;
What is the need that you are satisfying with this business?;
Distinguish your product or service from the competition;
Establish credibility of your management team, including your advisors;
Present key financial points ;
Identify funding being sought and how it will be used;
Summarize (not verbatim) the key points from all of the other sections.
Description, what is being provided by this business;
Mission statement ;
Vision statement – where you are headed;
Shared values that you use when hiring and at meetings;
Location of your business. If you are virtual, what geographical area do you support?;
Size of your facility;
License and permits;
The products and services you deliver.
Who is your market? What are its demographics and psychographics?
Competition. What are the strengths and weaknesses of competitors?
Management team. Who are its members both internal and external (advisors)?
Personnel. What are your staffing needs? What kind of training and compensation will be provided?
Marketing Plan.

Summary

Business Concept

Operations

Financial Information

How much capitol do you have and where did you get it?
What kind of financial support are you seeking?
What capital equipment do you have?
Include cash flow chart;
Include Profit and Loss Chart;
Include Balance Sheet;
Underestimate your future sales.

Supporting Documents

Anything that can validate your character, your financial stability, and your credibility;
Resume;
Credit Report, etc.

Some additional points:

Business planning is an ongoing, continual, cyclical process: plan, act, get results, record those results, analyze the results, modify your plan, and so on and so on.
Business plans aren’t just to satisfy bankers and investors. They can help make sure you are on the same page with your staff, can help organize meetings, and help remind your staff (and yourself!) why they are being asked to do the things they are asked to do.

It would be impossible for me to harness all of the richness of this workshop here. If you have time, you can check out an SBDC audiocast of a similar version of this workshop by clicking here: Your Business Plan: Soup to Nuts. Also, check out all of SCORE’s business templates.

Know someone who could us a hand with a business plan? Tweet this post!