| A number of years ago a friend came up with a | | | | |
| killer product idea targeted to fishermen. | | | | - Management Plan |
| It was one of those devices that, when you | | | | |
| think about it yourself, makes you wonder why | | | | - Financial Plan |
| you didnt come up with the idea. I expected | | | | |
| my friend to become a rich man. I planned to | | | | You will find that these elements are given |
| be there of course to remind him who his | | | | different names depending on whom you talk |
| friends were when he was still a nobody. | | | | to, and the order is not always the same. |
| | | | But none of that is the essential |
| He asked for my assistance in setting up his | | | | consideration. The key is that you have a |
| business and in designing his web site. My | | | | plan. |
| first request was let me see your business | | | | |
| plan. To which he responded, my what? I | | | | The Executive Summary is no more than a few |
| managed to stifle a groan and instead offered | | | | paragraphs outlining your overall goals and |
| to help him with it. So we sat down together | | | | objectives. |
| and came up with a three-page document. | | | | |
| | | | The Business Description identifies what you |
| The definition, and purpose, of a business | | | | plan to sell or offer, and the strategies you |
| plan is straightforward. It defines the | | | | will use to succeed. |
| goals and objectives of your intended | | | | |
| business, and provides an outline of how you | | | | The Marketing Strategies section details the |
| plan to get there. The plan we developed for | | | | vehicles you will use to garner awareness of |
| my friend included that, along with an | | | | the product(s). In the case of my friends |
| outline of how he was going to market the | | | | business, we described how we would use not |
| device. We left out the usual competitive | | | | only the web site, but also print ads in |
| analysis since his was a one of a kind | | | | several fishing magazines, along with fishing |
| product. We included a section that detailed | | | | forums and newsgroups. This section also |
| how he would deliver the product; which was | | | | describes how you plan to brand your product. |
| the use of a 3rd party company for packaging | | | | For my friends product, we came up with a |
| and drop shipping services. | | | | very spiffy but easy to remember name. |
| | | | |
| Originally, he had not considered several of | | | | The Competitive Analysis section identifies |
| the items we incorporated into the final | | | | what other companies offer the same or a |
| plan. Once completed however, the plan gave | | | | similar product(s), realistic pricing |
| him a clear direction for operating his new | | | | structures, and how you will attempt to set |
| business. He sold the device through his web | | | | yourself apart. |
| site and did quite well. After 18 months, he | | | | |
| received an offer for a buy out from a major | | | | The Operations section describes your |
| fishing and outdoor product company (most of | | | | approach to the day-to-day operation of the |
| you would recognize the name). The deal was | | | | business. This includes all the mundane |
| made and my friend walked away with a rather | | | | details from accounting to distribution |
| tidy sum of money. | | | | channels. |
| | | | |
| Your business plan is an essential first step | | | | The Management plan describes your general |
| on your road to success. Making it up as you | | | | approach to the management of your business. |
| go along simply does not work. The plan | | | | Remember, 90% of small businesses that fail, |
| provides a roadmap, and gives you a means to | | | | do so as a result of mismanagement. |
| objectively analyze how effective your | | | | |
| approach is. In a situation where you | | | | The Financial plan section identifies your |
| require a loan to launch your business, any | | | | need for a business loan (if needed), and |
| bank or lender will require you to have a | | | | your plan for paying off that loan. It also |
| business plan. | | | | includes information about your break-even |
| | | | points and return on investment (ROI). |
| The contents of a business plan can be as | | | | |
| simple or complex as is required. For the | | | | Let me end this article with a question. If |
| vast majority or small businesses, a | | | | you were going to have a home built, would |
| 5-10-page plan will usually suffice, | | | | you just let the trucks with the cement, |
| depending on the business. While every | | | | 2x4s, shingles, wallboard, siding and so |
| business plan is a little different, the | | | | forth just pull up to your lot, and then have |
| basic elements are: | | | | the builders proceed with no blueprint in |
| | | | hand? Would you just hope for the best that |
| - Executive Summary | | | | the toilet bowl doesnt end up in the kitchen |
| | | | or the exterior door doesnt end up in the |
| - Business Description | | | | attic? Of course you wouldnt. No sane |
| | | | person would build a house without a detailed |
| - Marketing strategies | | | | blueprint. |
| | | | |
| - Competitive analysis | | | | Then why would you do exactly that with your |
| | | | business? |
| - Operations plan | | | | |