Do-It-Yourself Business Plan? Yes, you can!
What is a Business Plan? What are the results you want?
Good questions. Here are my answers.
A business plan is a document that describes your idea for realizing a business opportunity. It describes the market need that you have identified and the proposed strategies and plans to turn your idea into a profitable business.
The business plan is a communications tool to be used with all the prospective participants in your project. It will identify and confirm the business opportunity, define your proposed business model for responding to that opportunity and describe the strategies, operating plans and financial results that you expect.
It is not exactly a sales document, but it will be used to sell your concept and approach to convince sources of financing and strategic business partners to participate in your plan.
An acceptable Business Plan will include a detailed and comprehensive description of the planned project or new venture with extensive financial analysis and projections, plus supporting material that might include executive profiles, product brochures, facilities plans and market research studies.
The three key components in a Business Plan therefore, are:
- A clear, persuasive description of the business opportunity and your strategies and action plans to respond to it.
- A complete detailed set of financial projections confirming the investment required and the expected future profitability.
- Supporting documentation that confirms the objective research and analysis for the conclusions, proposals and projections shown in the plan.
The Complete Do-It-Yourself Guide to Business Plans will explain:
- How to prepare all the elements required for a complete business plan package
- How to get the most out of the process
- How to get the results you want.
Why Do You Need a Business Plan? It has a purpose.
The most common reason for preparing a business plan is, “because the bank asked for one.” That is probably why most readers of this Guide are here. And that is obviously a legitimate reason for doing one. But why is the bank asking for one? And do you need one for the same reasons?
The answer is as simple as the familiar cliché: If you fail to plan; you plan to fail.
It’s hard to know where you’re going and how you’re getting there without a plan. It’s even harder to manage your progress if you haven’t defined your destination and set the milestones to monitor along the way. What route are you taking? What type of vehicle are you using? Who’s driving and who are the passengers? Why?
The bank, and any other investor or business partner, wants the answers to those questions to assess whether or not you are likely to succeed and whether or not they want to support you.
You need a business plan for all the same reasons.
Every business needs one, from the start-up to the exit.
Documenting a Business Plan is an extremely useful process to focus the owners and the management team on their business model, strategies, and operating plans. The process will force consensus and decision making that might otherwise be neglected. It requires issues to be resolved and the conclusions to be documented after testing alternative solutions and their financial consequences.
A well-documented business plan will help you communicate the most important elements of your strategy and plans to the people who need to know them the most. Including you.
Maybe you’ve been successful in business for many years and never had a business plan. It's still a good idea for all the same reasons. And now is a good time.
Maybe you’re ready to exit your business. Even better. A solid business plan will be the most important document you have to support the value of your business for sale or transfer to a new owner.
The greatest value of a business plan, however, is always in the process – involving your management team in a thorough examination of your business; its purpose, its strategies and its plans to ensure success. When it’s completed, all the key players will be more knowledgeable of the issues, the opportunities, the risks and the alternative paths considered and the reasons for the choices that were made; before committing to the final plan.
For a small business start-up, that management team may only be you. Maybe you’d rather keep your plans to yourself. But the business plan is still a valuable exercise. It forces you to answer all the questions that you should ask yourself and that will certainly be asked by the next people to get involved.
With a well-documented business plan you will be better prepared to meet all the challenges and more likely to succeed.
Be better. Do better.
And take care of yourself,
Del Chatterson, your Uncle Ralph
Learn more at: LearningEntrepreneurship.com
Read more in Uncle Ralph's books of advice for Entrepreneurs: Don't Do It the Hard Way & The Complete Do-It-Yourself Guide to Business Plans - 2020 Editions.