Business Plans ...

Starting & Operating a New Small Business		  
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Business Plans


"If you fail to plan. you plan to fail..."
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What is a plan?
  • a word picture
  • a visualization of your business
  • written document
    1. situation analysis (where you are)
    2. objectives (where you're going)
    3. 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
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

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?