Many women are so confused by the words - "Business Plan". What is it? Who do I show it to? Do I really need it? What is it really going to do for me?
A business plan is a written blueprint for your business. It describes a summary of what your business is about and its goals. It also outlines how your business will function. The term "business plan" was first developed by bankers who wanted a detailed report of how a business would result in profits before they would make a decision on lending money. Today, no business banker will even entertain a business loan application without a business plan.
So in a nutshell, the answer is yes, you really do need a business plan if you want to build a solid foundation under your business and have a professional blueprint to show to possible investors or lenders.
One of the reasons so many women procrastinate in doing a business plan is because they think they have to come up with some imaginary figures and statistics about their business, which is of course very scary for anyone. This type of plan is known as an Executive Business Plan. This plan is shown to banks, SBA micro lenders and other lending institutions who you may apply to for a substantial loan. Usually, this type of business plan must show a 3-5 year projection of how much money your business would make if they should lend you a specific sum of money. Although you will need this type of business plan should you wish to expand your business, the most important thing for you to know now is where you will be in the next 3,6,9 and 12 months.
One of the best form of business plans to start out with is the "Working Business Plan". This plan answers the 5 "W's" - Who, What, Where, When and Why.
There is no pre-required length that a Working Business Plan should be. Just remember that you aren't writing to impress, you are writing to address the important issues of starting your business based on solid research and planning. This plan is just for your planning purposes and can be expanded later on into a full executive plan.
The following outline will help you in processing your thoughts and writing your Working Business Plan.
- Mission Statement - What is the goal of your business? What purpose does serve?
- Objective - What will the outcome be for your business as a result of your mission. (Ex: K.G. enterprises will gross over $50,000 it's first year with a 5% error margin on its documents).
- Management - Who will run the business and what qualifications does the person have. What additional skills or resources are needed? What are the names of others that might be able to serve as mentors or help you in grooming your business for success?
- Service/Product - What products or services are being offered? How will they be produced? If you are selling a product, how much of the product will you need in stock? Do you have the start-up capital needed to purchase the produce? If no, how will you raise the capital needed?
- Customers - Who are your customers? What area are they in? Is this a service or product they will want to buy? Do a typical profile of a repeat customer.
- Competition - Who are your competitors? Where are they located? What are their prices? What services or products do they sell? How could you do better?
- Marketing - How will you market your business? How much money will you need to market your business? How is your competition marketing their business? Do you need business cards, brochure, stationery, fliers etc.?
- Office Set-up - What are your daily office procedures, what will you do each day that will result in the sale of your service or product? What bookkeeping system will you use and how often will you input your information in the system? Do you need a bookkeeper? What supplies do you need? What type of furniture do you need? What office equipment will you need? Where will your office be?
- Finances - HOW MUCH MONEY will YOU NEED FOR THE FOLLOWING?
- Your Income
- Bank Fees
- Business Insurance
- Business Lease/Rent
- Internet (include website, hosting etc.)
- Networking - Who needs to know about your new venture and why? What contacts do you need to have? Why do you need to know them? What can they help you with?
- Contact Management - Establish a good contact management system for yourself. Today, keeping a list of contacts on paper is not efficient. A good contact management software will be needed. If you currently use MS Office, you should have MS Outlook already installed and it will serve the purpose nicely. Other popular contact management software are ACT and Goldmine. Regardless of what contact system you have you must be willing to update your system at least twice per week.
Evaluate how you will manage you contact system. Make sure to schedule this in your planner or palm.
- Sales - The number of clients you service or products you sale will give you a true picture as to whether or not you are having success with your business. But first, you must have a measurable sales goal in achieving this success. Start by evaluating where you want to be in sales for the first 3 months, 6, months, 9 months or one year. By doing this you will be able to re-evaluate your business plan every three months and determine if you need to improve in marketing etc.
- Starting Date - Set a starting date for when you want to begin your business or put into place this working business plan. Make sure you have printed material available for all services or products offered. Also evaluate and follow-up with yourself daily for the first month to ensure that you are following your own plan. After 30 days, follow-up on a weekly basis and then monthly from that point on.
- Remember, no plan will work unless you are willing to put it into action!
About the Author:
Trina Newby is a Business Consultant, Founder & CEO of Women About Biz, a membership organization that provides small business resources, tools and networking opportunities for women.