Business Plans Don't Be Intimidated
I know what you're thinking when you read the title of this article - easier said than done, right? I hear you. But let's look at one of those words in your question, "said". If you are planning to start a business or are already running a business, you are actually "saying" your business plan, at least components of it, EVERY DAY. Check this out:The Conversation
Me: "Hi Joe. Heard you are starting a new business. What kind?"
You: "Oh, hi Jim. Thanks for asking. Yeah, John and I are going to be selling square widgets to round widget distributors."
Me: "How're you going to do that?"
You: "I found out that no one has thought to offer square widgets to these guys. I asked around, and it looks like these guys not only NEED square widgets, but they will pay a premium for them."
Me: "Sounds good. Where are you going to get your square widgets?"
You: "I found out that the round widget guys don't need the perfect square widgets, so I am buying seconds, cleaning them up a little, and repackaging them for my round widget customers."
Me: "Sounds like you found a niche. How many can you sell in a year?"
You: "We've identified the need for 15,000 this year, and with the trend in the market, we think we can double that within three years. Gotta go. See you later."
How long did this conversation take - two minutes from start to end? Let's look at what was said. You identified your:
• business
• management team
- industry
• business' focus - your niche
• customer profile
• vendor profile
• pricing strategy
• market research
• growth plans
See?! You probably "say" your business plan every day, you just might not be getting it down on paper, or in your computer.
Meat On The Bone
With the addition of a few other elements, and "putting some meat on these bones", as Tim Berry says, you've got yourself a basic business plan. By the way, Tim is president of Palo Alto Software, a member of my Brain Trust, and one of the world's foremost business planning experts.
Tim and I have spent a lot of time talking about this issue, and he says the outline of a basic business plan should have at least seven major categories. Here's the good news: In our little conversation earlier, you identified components of ALL of them. Here are "Tim's Seven":
1. Executive Summary
2. The Company
3. Products and Services
4. The Market
5. The Strategic Plan
6. Management Team
7. Financial Plan
Let's Get Started
OK. You know you need to get a plan done because: You want to borrow some money from a bank; or you're talking to an investor; or you know it's just good business. But, for some reason, you are absolutely stuck. Just can't seem to get this thing out of the mud. Don't worry, I've got you covered. Try this:
Write each one of "Tim's Seven" down at the top of a separate piece of paper, or at the top of seven pages in your word processing software. Then have "the conversation" with yourself. Yes, literally. Out loud. As you do, write your answers down in the appropriate section. Even if it's just one sentence, and don't worry about quality right now.
Congratulations! You've started your business plan.
Planting Seeds
You can't eat the fruit of a plant whose seed you haven't planted, and you can't expand on a written plan that you haven't started. Think of the first words as seeds. From these seeds, as dumb as you may think they are at first, are going to grow your finished business plan.
Write something down in each section as often as you can - even if it's just a little every day. Don't worry if what you feel like writing today doesn't seem to "flow" with what you have already written. One of the most interesting things about writing is that sometimes the last thing you write will go at the very beginning, and you may put the first thing you ever wrote in the conclusion. So don't worry about order at first. JUST START WRITING!!!
Don't Make These Mistakes
Tim Berry says don't make these three common mistakes when you need a business plan:
1. Don't wait until you need it.
You know your banker is going to ask for it eventually. And one thing you can count on is that he will ask for it at the precise time that you need the money. Which means that you won't have the time, or cashflow, to wait until you can create a business plan from scratch.
Here's a thought to motivate you: think how proud you will be (and how impressed your banker will be), if when he asks for your business plan you say, "I brought it with me today. Is one copy enough, or would you like two?"
2. Don't wait until you have the time.
If you are like most people, you are already wearing 8 different hats at the same time. Please! Tell me when you are going to have the time to just sit down and produce a plan? But you have to do it, and if you start now, and use the incremental method, before long your business plan will be done.
3. Don't make it harder than it has to be.
Another friend and Brain Trust Member, Kelle Olwyler, co-author of Paradoxical Thinking, says when we get stuck on a project, we need to determine whether the problem is the issue at hand (the business plan), or the process (getting it on paper). Identify where your business plan is stuck. You might find that you are making it harder than it has to be.
Let's net this out: The business plan that you can't seem to get done is just words and numbers on paper. Ironically, you are the world's expert on these words and numbers. You know them backward, forward, and in your sleep. Kelle would say if you can't get your plan written, it's probably not the plan that's the problem, it's the process.
Write this on a rock...You know the plan. Remember, you're the expert. Focus on the process: The way you organize, focus, and attribute the time to producing your dream on paper. Here's the payoff: when your plan is done and on paper, others, like your banker, your partners, and your employees, can use it to help you. Sounds like a plan, to me.
