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