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Sunday, March 29, 2009

Making a Business Plan

I'm just the sole owner of a small home business. I don't need a business plan. Those are just for big businesses. I work out of my bedroom!

This was the answer I got when I asked a coaching client if she had her business plan finished! She had no plan and truly felt she didn't need one. Mistake? Absolutely! If you have a business that you invest time and money in, and if you want that time and money back plus more - you need a business plan. It doesn't have to be a multi-page, formal presentation. Although the typical business plan is approximately 20 pages, my first plan was a single side of one sheet of notebook paper! Size isn't important - as long as your plan is useful.

I'm going to help my client write her plan. If you don't have one yet, let's help you write yours also.

First, what is your objective? Where do you want your business to be five years from now? Are you content to be a one-man small enterprise, working from your bedroom like my client? Or do you someday want to have an actual physical location with dozens of employees? Perhaps you'll even expand into a chain - each location run on your ideas and principles with hundreds of workers. There's no right or wrong answer here, so don't feel less than successful just because you really don't want to grow that large.

How much money are you making in five years? Just enough to replace your job? Enough to completely financially free? Put a number on it. $50,000 a year? $500,000? $1 million? Again, there's no wrong answer.

Now that you know where you want to go, write your plan to get there. How will you do it? Will you need some money up front to invest or can you start small enough that you can come up with your own financing? If you will require financing, where will you get it? Will you be working your business full time or part time while still holding a job? What product or service will you offer? Who is your target market? How soon do you plan to become profitable?

Who are your competitors? How is your product or service different from theirs? How will you market that difference?

What price will you charge for your product or service? If selling a product, how will you distribute it - direct sales, affiliate program, retail distributors such as department stores?

How will you market your product or service? What types of advertising will you use? Sales promotions? What about your PR campaign?

After reading this and answering these questions, you should be ready to prepare your own basic business plan. If you're still hesitant, ask for help. There are several resources available to assist you in creating your business plan. Check out any of the following:

- Small Business Development Centers: SBDCs offer a wide variety of information and guidance to individuals and small businesses. If you need help developing your business plan, the SBDC counselors can help by offering assistance with market research, cash-flow projections and more. And, in most cases, the help is free.

- SCORE: A source for all kinds of business advice, from how to write a business plan to investigating marketing potential and managing cash flow. SCORE counselors work out of hundreds of local chapters throughout the United States.

- Business Plan Pro: The most popular business plan software. Business Plan Pro offers 500+ business plan templates, market research data, and expert advice at every step.

- Creating a Successful Business Plan: This book from Entrepreneur Press is filled with practical advice, easy-to-use how-to lists and forms, and step-by-step guidance to offer you a proven blueprint for creating a high-impact business plan.

4 comments:

L:aurie Neumann said...

Good advice. I don't think the plan has to be complicated or extremely long, but the questions you have asked should be answered by everyone going into business.

Thanks!

Virtual Woman's Day said...

Melodieann,

I totally agree with you. How can we take ourselves seriously if we don't treat our business like a real business, even if we work out of our bedroom?

It is so easy to put things off or not do this or that, but when we put it in writing we are more likely to hold ourselve accountable to our own success.

I agree with Laurie ~ GREAT advice!

Heidi Richards Mooney, Author, entrepreneur, business coach
www.redheadmarketingblog.com

Pat Montgomery said...

I just finished writing a business plan--no clue how to do. So I went to the SCORE website and found a great template, complete with instructions.

My kids helped me with the financial spreadsheet. My husband helped gather info and took some photos we used in the plan.

It was a family affair. We turned int over to the investors last week--wish us luck.

But is was easier with the template.

Joyce Mason said...

What an excellent how-to on biz plans, Melodiann. It has helped me rethink and realize I have some revisions to make in mine! Thank you.