The term "business plan" has become very popular in the past decade. Bankers and venture capitalists want to see one before they make an investment decision. Experienced business people encourage aspiring entrepreneurs to "write the business plan." Their advice is sound.
Writing a business plan forces you to think about all aspects of running your new venture. You may spend up to 200 hours researching and writing the plan at a time when you are already incredibly busy.But you need to know what you are getting into before you forge ahead.There are definite rewards for developing a business plan. If you are seeking investors, it helps them to evaluate your venture critically. Most of them will not even talk to you if you don't have one. A written plan enables others more easily to give you suggestions.
Who knows? The financial section of the plan may open your eyes; you may discover that there is little chance of a profitable business. In certain cases, the information uncovered in researching the market may induce you to change your product or the way it is marketed.
Remember that it is of the utmost importance that you be involved in writing the plan yourself. If you hire someone else to do all of it, it's not the same. You need to have a solid understanding of your business and its environment.
Granted, hiring others to do some research or edit the plan makes sense, but you need to be intimately involved yourself. It's just like delegation of responsibility to employees; it's smart and can save time, but can cause you to lose control faster than you might think.
What should you include?
A business plan is a comprehensive description of your business, the environment in which it operates and how you will run it. Most plans project three years into the future.
You can't write a business plan without knowledge of a broad spectrum of business principles. The plan is larger in scope but includes all the sections of the strategic plan and includes more detail. There are numerous outlines for business plans, but all are quite similar. The following outline lists the major sections of a typical business plan.
1. Executive summary; 2. the company and its overall strategy; 3. the market and competitors; 4. marketing strategy; 5. designs and development plans; 6. manufacturing and operations plan; 7. management team; 8. overall schedule; 9. critical risks and problems; 10. the financial plan; 11. proposed company offering; 12. financial exhibits; 13. appendices.
Be aware that some questions will not be pertinent to your business and can be disregarded. Conversely, each business has certain distinctive operating circumstances that need to be described but cannot be included in a general outline like the one above. Don't be afraid to adapt the business plan to convey any unusual aspects of your business. After all, you can't make a square peg fit in a round hole (at least it's not a good idea).
Although you should never lose control of the content of your business plan, there are a number of sources available to help you now that you may be saying to yourself, "I think I'm more confused than when I started." Two such sources include The Utah Small Business Development Center and "The Utah Entrepreneur's Guide," by Dr. Paul Larson and Dr. Roger H. Nelson.
"The Utah Entrepreneur's Guide" is a comprehensive how-to manual on starting and managing a business in Utah. A copy of this book can be purchased from the publisher, University Press. For information, call (800) 243-6840.
The Utah Small Business Development Center (USBDC) periodically runs courses on creating a business plan. For information and/or registration, call the USBDC at (801) 581-7905.
Yes, it is a lot of work. Yes, it can be time-consuming. However, not doing it will only serve to slow the development of your business. Take the time, whether in the next couple of weeks or spread over the next year, and write it.