| What
is a plan? |
- a word
picture
- a visualization
of your business
- written
document
- situation
analysis (where you are)
- objectives
(where you're going)
- strategy
(how to get there)
|
|
"A
good plan violently executed now is better than a perfect plan
later."
|
|
General
Patton
|
| Purpose
of a Business Plan |
- dry run
- risk free practice, feasibility, survival probability
- vision onto
paper - conceptualize, organize
- communication
tool - goals, directions, guidelines, yardstick, contingencies
- obtain resources,
funding,
- find weaknesses
- Manage growth
|
Every plan is
written for someone, with a purpose in mind. You are writing
for an audience and you want something from that audience. The style,
the parts, the jargon, the organization and emphasis should all be
tailored to that specific audience in order to be effective. Carefully
choose your audince and set your objectives before writing.
| Target
Audience |
- Yourself
- Team Members
- Attract partners, expected contributions
- Management,
attract key employees
- Regulators
- town council, obtain permits
- Community
- acceptance
- Stockholders,
banks/lenders and investors- prospectus or broker brochure,
live presentations
- Investors/Partners
- Suppliers
- Other Businesses
- form strategic alliances
|
| Writing
a Business Plan |
|
Today, business
plans are written on the computer. They usually have a word processed
part that follows an outline describing all aspects of the business,
its business climate, and spreadsheet parts that cover
financial sources and uses of capital and pro forma financial
statements. We will look at outlines for business plans later.
|
|
Help
with writing your business plan
|
|
There are many
software packages available that include templates for the wirtten
narration and templates for the financial data. They cost anywhere
from $50 to several hundred dollars and up. BizPlan Builderer
by Jian and PlanWrite: a Business Plan Toolkit by Business resource
Software, Inc. are examples that are widely available. Help is
availble thru:
- software ($50
and up)
- private
consultants ($50/hour and up)
- Business
Classes (tutition = $12 and up, plus textbooks)
- Small Business
Development Centers (SBDC's) (40 hours free,
fee thereafter)
|
Business
Plan Outlines
A Business Plan begins
with these essential questions:
- Is there a need
for you product or service?
- Who is the target
market?
- How is it different
from competitor's offerings?
- Do you have any
competitive advantages?
- How will it be
Profitable? How Profitable will it be?
- Can you manage
operational cash flows?
- How will you fund
the business?
Below are two popular,
full outlines for a business plan. Both are used by the SBDC. |
SBDC Services
Version 1
Version
2
| Great
Business Ideas - part 1 |
| What
separates the successes from the failures? |
- They are
carefully planned
- They are
well capitalized
- They are
niche players
- They are
not pioneers
- They learn
from their errors
- They learn
from their competitors
- They are
managed according to a method
- They are
customer centered
|
| Some
Business Plan Writing Tips |
When writing
a business plan, remember to choose an audience and objectives
first. You may wish to have differing versions of the plan
written for different audiences. This is a common practice.
- Importance
of First Impression
- Use a
Business Writing Style
- Contents
Based on Target Reader
- Good Executive
Summary
- Table
of Contents/Page #'s
- Appendices
- Binding
and Cover
- Executive
Summary
- Confidentiallity & Qualifying
(non-disclosure of ideas and protect owner from being hit
with a lawsuit if things go wrong)
|
Non-Disclosure
Concerns
I
have an idea or two that I think would be very valuable
to to a large company I used to work for or a competitor
of theirs. I was thinking of either marketing the idea
myslef by writing a business pla and getting investors
or selling it to one of the large companies. I'm afraid
of getting ripped off. I know I have to talk about the
idea in both cases but how can I be sure they won't take
my idea? I might reveal too much.
Response: Many
people are more paranoid about this than need be. Most
reputable companies and people would rather buy the rights
than risk lawsuits and big payout later. Many invstors
don't want to or can't do the work it takes to produce
and market something.
Your
idea may not be as valuable as you think. A big part
of business success isn't the "big" idea or
even innovation. It is usually in the execution and details:
having a plan, finding a market, pricing, distribution,
etc.
Think
about proposing a book idea about a witch academy or
a way to sell products with high prices and very limited
breadth and depth of product lines. (Harry Potter and
7-Eleven)
Protecting
Your Idea
- Patent
genuine inventions
- Copyright
software, writings, bsuiness plans, ads, music, etc.
- Rely
on a signed Non-Disclosure agreement; some companies
won't sign
- Realize
that general concepts are difficult to protect and
my not be unique to you or original at all
- License
the idea, don't sell it
- Expect
lots of non-interest.
- Get
Nolo Press Books: "License Your Invention" by
Simm, or intelectual property books; consult with a
lawyer; avoid infomercial products
http://www.nolo.com
Confidentiality
and Qualifying Disclaimer Statements
Sample
1 | Sample
2-1 | Sample
2-2 | Sample
2-3
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|
| Assessing
a business plan: The Reader |
|
What do
readers of business plans look for when reading. The following
is a list of items that a professional reader, such as a banker,
would look for:
- Who is the
Start-up Team? What confidence do you have in them and why?
- What is
the Product?
- What is
the unique selling proposition?
- How much
start-up capital is needed?
- What is
the proposed source of capital?
- What is
the businesses purpose or mission?
- What is
the opportunity? What is the competitive advantage?
- What are
the risks?
- What is
the Market potential?
- Who is the
typical customer?
- How will
the business be marketed?
- What is
the business name/brand names?
- How many
employees?
- What is
the expected monthly/yearly profit?
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