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Do You Have a Business Plan?
Why
you shouldn’t
run a business without one.
By Maury Z. Levy
So you’re spending the weekend at the shore. Let’s see, you’ll
just pack a couple of bathing suits, a pair of shorts, a t-shirt or two.
But wait, what if you go out to dinner at a place that doesn’t
use paper plates? Hmm. You’ll want to bring along a nicer shirt
for that. A nice polo should do it. And what if it gets a little chilly
down there? You know those sea breezes. How about a pair of chinos while
you’re at it?
Hopefully, it will be a beautiful, sunny weekend. Oh, better pack some SPF 450 for protection. And a hat. A baseball cap should do the job. It will both cover your head and shade your eyes. But what if the weather gets risky? You’ll want to be prepared. Better toss in a jacket with a hood. Maybe even a mini umbrella. You want to be ready for all contingencies.
Maximize reward, recognize and minimize risk. If only you planned your business this carefully. When was the last time you revised your business plan? Do you even have a business plan? It doesn’t matter if you’re a big bank or a small frozen custard stand. You need a plan!
Not sure how to do it? Here, step-by-step, are the basics:
Executive Summary: What you do; how you do it; how much money it costs; and an overview of the marketplace and where you fit in and excel. When you write this, assume that people will read nothing else. Make this your mini-plan.
Objectives: What do you plan to do for the first few
years of operation? Let’s say you own that custard stand. Your
objectives might look like this:
• The creation of a unique, upscale, innovative environment that will differentiate
Cream Dream from local ice cream stands.
• Educating the community on what Cream Dream has to offer.
• The formation of an environment that will bring people with diverse interests
and backgrounds together in a common forum.
• Good ice cream items at a reasonable price.
Mission: Your basic reason for being. As the popularity of freshly-made, all-natural ice cream grows, Dream Cream will provide the community with quality products, add-ons, and services at a reasonable price and in a comfortable environment. People of all ages and backgrounds will come to enjoy what Cream Dream has to offer.
Keys to Success. This is the side of the legal pad where you’ll list all of your plusses.
Risks: This is the other side of the pad. What could work against you and how can you best deal with it?
Company Summary: How concise can you be? This is what your company does and how you do it.
Company Ownership: What are your background and qualifications? What about your partners and the people who work with you. This is where you separate the bright minds from the cone heads.
Startup Summary: How much do you need to really get this company off the ground? Categorize and itemize!
Market Analysis Summary: Who else is out there and where do you fit in?
Market Needs: Will the demand for frozen custard stay firm or melt away? What can you point to that will support your position?
Business Participants: Who else makes up your team? Where do you buy the milk and sugar, and how reliable are these companies?
Competition and Buying Patterns: Who else is doing what you do? Why will people buy from you instead of your competition?
Strategy and Implementation Summary: Who are the custard eaters, and how will you attract them? Here's where you include your Competitive Edge, your Marketing Strategy and your Pricing and your Promotion. And what’s your sales forecast? Let’s see those charts!
Financial Plan: Everything from cost of goods sold to payroll and rent. Legal fees, marketing fees, key financial indicators. What’s your true bottom line?
Of course, this is only a start. You’ll want to review and revise this plan on a regular basis. You need to face the cold, hard facts. It’s only when you reach this point that you can add jimmies.
