Who Needs a Business Plan?

As I travel through the arena of business consulting, I am asked: “Who does need a business plan?” The answer – Anyone who is in business. Whether you are starting a business or have been in business for a while, you still need a plan, a roadmap of sorts. That roadmap will lead you from where you are today to where you want to be tomorrow.

So why is it that few people have a plan? I have found that for the most part, it is because they don’t know where to start and then see it as a tremendous amount of work. They also think it will cost an arm and a leg. I understand it. The traditional business plan can be one of those exercises that’ll kill your desire to even think of going into business. It does not have to be that way. It also doesn’t have to cost a lot.

A business plan can be a strategy document. It can be a business plan framework. And yes it can be a full-blown business plan. The first thing you have to decide before you start working on your plan is to decide what sort of plan you require. The plan is first and foremost for you; however, it could be that it is also for potential partners, investors or a bank. The “who it is for” will lead you to decide what plan you require. Knowing your budget is also imperative.

If you have decided what type of plan you require, the next step is to clearly define your concept. You have to know exactly what it is you are trying to do and how you are going to do it. You have to understand everything about your business. This is no longer an idea; instead, it is a clearly thought out concept with details so exact that you can describe what is happening in your business a year from now. If you cannot do that, your concept is still only an idea.

The next step and most important step is to “prove” your concept and you do that by completing a financial forecast for your first year of operation. This is where most people stop doing what they are supposed to do. They start guessing and guesses result in $10,000 mistakes. You need to project customer counts and average spends to get to your revenues. You need to understand cost of goods sold and other expenses from marketing and sales and bank charges to automobile expenses and more.

Start-up costs come next. You’ll need to build or renovate a space. You need to buy equipment, furniture, fixtures and supplies. You need to set aside money for deposits, accounting software and industry-specific software. There there is marketing and training. Yes, a lot to think about here.

Designing a marketing strategy is next on the list. You have set targets in your financial forecast for sales and revenues. To achieve and hopefully exceed those numbers, you must design a comprehensive marketing strategy. Included in the strategy will be both traditional and “new age” marketing tactics.

The last stage of the plan is also important. You have to identify key members of your team – those on an operational level and those on an advisory level. Showing the reader that you are not “going it alone” makes you look like a real strategic thinker.

So whether you are just starting out or have been in business for a while, a realistic and up to date Business Plan is the key.