Invest In My Idea

If you’re like most people who get this far into the business-planning process,you have some questions right about now. You may even be at the handwringing stage. Well, you can put your mind to rest because, in this section, we answer the most frequently asked questions about writing business plans.

Do I really need to include all these sections?
Nope. Your business plan should include only what’s important to you and our company. If your plan is short — or written mostly for your own purposes
— you can dispose of the executive summary, for example. And if ou’re a company of one, you probably don’t need a section describing the organization of your business (unless you want to give yourself a plan for how to get organized yourself!).
For most businesses, however, the more complete your business plan is, the better off you are. If yours is a one-person operation, for example, you may figure you can do without the company overview section because you already know what your business is all about, right? Well, you may find that by compiling that section — by putting your mission, vision, values, product offering, and unique attributes into words — you uncover new ideas about what you really plan to do with your business. And that can be an extremely valuable exercise for any company, no matter how big it is.

Do I really need to write it all down?
The one-word answer is yes. Creating a written plan forces you to face tough iissues that you may otherwise ignore, such as
 How big is my market?
 Why will customers come to me and not my competition?
 How much money do I honestly need to get the business off the ground?
 When can I realistically expect to make a profit?
 What other opportunities can I take advantage of?
 What threatens my business?

By putting your thoughts down on paper, you give each question the attention it deserves. For example, when you write your business plan, you define your customers and your strategy for reaching out to them; you also analyze your competition and how your offerings compare to theirs; you uncover market opportunities to seize and threats to buffer yourself against; and you establish a set of goals and objectives — along with your action plan for achieving success. And when you’re done, you have it all in writing for quick, easy, and frequent reference.

How long should my plan be?
The simple answer: as long as it needs to be and not a single word longer. A business plan as thick as a Stephen King novel doesn’t impress anyone. In fact, it’s likely to scare them off. What really impresses investors, clients, employees, and anyone else who may read your plan is clear, straightforward, and to-the-point thinking. Don’t go overboard in the cutting room or leave anything important out of your plan purely for the sake of keeping it brief, but do condense every section down to its most important points. Even comprehensive plans usually fit on 20 to 30 pages, plus appendixes.
And that makes many 100-page business plans about 75 pages too long!

Establishing Your Plan’s Time Frame

Your time frame represents how far out into the future you want to plan. You want your business to grow successfully for years and years into the future, but that doesn’t mean your current business plan goes all the way to forever. Each business plan covers a unique planning period. Some are designed to get a company to a defined sales level, a funding objective, or the achievement of some other growth goal. A good business plan covers a time frame that has a realistic start and finish, with a number of measurable checkpoints in between. 

Committing to a schedule

How far out should your planning horizon go? Your answer depends on the kind of business you’re in and the pace at which your industry is moving. Some ventures have only six months to prove themselves. At the other end of the spectrum, organizations that have substantial endowments, such as nonprofits, are in for the long haul with business plans that look at five- or ten-year horizons. Typical business plans, however, tend to use one-year, three-year, or fiveyear benchmarks (odd numbers are popular, for some reason). Business planning is an ongoing process. From year to year — and sometimes more often than that — companies review, revise, and even completely overhaul their plans. As you establish your time frame, don’t worry about casting it in cement. Instead, think of your schedule as something you commit to follow unless and until circumstances change and you make a conscious decision to revise it. 

Defining milestones

Setting goals and establishing measurable objectives is a critical part of business planning. But knowing your goals and objectives isn’t enough. You can’t just say you’ll get around to achieving them; you need to establish and hold yourself accountable to a schedule that includes specific milestones along the way. Figure 1-1 shows how a retail store specializing in digital equipment (cameras, recorders, and other devices) answered five basic questions in order to establish a reasonable time frame for its expansion plans. Based on their answers, the owners determined that the business would need one year to open new stores and achieve profitability. Over that yearlong planning period, they defined a number of milestones:

• Month 1: Complete business plan
• Month 2: Secure business loans 
• Month 3: Begin search for retail space
• Month 5: Lease and develop retail space; begin hiring
• Month 7: Open shops; run holiday ads
• Month 8: Holiday shopping season begins
• Month 12: New stores become profitableYour responses will help you set a time frame that includes your key milestones and takes into account your business trends and cycles and the competitive and financial realities of your business.  

Preparing for the Real World

You’re about ready to dive into the business-planning process. By now you’re pretty certain about the purpose and benefit of your plan, and you have a fairly clear idea of who you want to read your opus when it’s ready and what you want them to find out and do as a result. You may even have a preliminary idea of your planning timeline. 

Locating informative resources

You’re certain to have questions as your business planning gets underway. For instance, you may want to find out about trends in your industry or marketplace or obtain information on your customers or competitors. Maybe you need more information before you develop your marketing plan or need help with your finances. Luckily, you have plenty of places to turn to for help.Here’s a list of the places you can check out for more information: 

1. The Internet: You can dig up information on markets, customers, competition — you name it. When using search engines, enter your best-guess term for what you want to find, and you’ll be amazed at the results. You can also visit industry Web sites for goldmines of information. And, by all means, go to the sites of your leading competitors to read company overviews, news releases, and all kinds of other information.
2. Your local college or university library: The periodical section of your library has business journals and other useful publications, and the reference shelves contain books on market demographics, industry trends, and other factual resources. 
3. A nearby business school: Many schools offer seminars or night classes open to the public, and professors are usually happy to answer your questions.
4. Industry trade journals: Yes, the subscriptions are sometimes pricey, but they’re often well worth the investment.   
5. Newspapers: No matter what your business, The New York Times, The Wall Street Journal, and a local paper keep you on top of issues you should follow.  
6. Trade shows and industry symposiums: These gatherings are usually great places to get news about products, services, customers, and your competitors — all under one roof.
7. U.S. Small Business Administration (SBA): A rich resource for just about everything you want to know about starting and running a small business. Look online at www.sba.gov. 
8. Search and research companies: Using these resources comes with a price, but sometimes a LEXUS/NEXUS search or a market-research study is the only place to find must-have data.
9. Professional groups: Almost every profession has a professional group, from the American Medical Writers Association to the Society of Wetlands Scientists. Find the group that serves your business arena and check out the Web site and membership requirements.
10. Local business networking groups: These groups are comprised of members with experience, insights, and even business referrals to share.
11. Your local chamber of commerce: This organization is a good vehicle for networking and staying abreast of local and state issues and can serve as a resource for all sorts of business and regional information.  

Seeking expert advice

When you can’t find the answers to specific questions, ask for advice. For example, if you’re thinking of starting a retail business in town, ask other retailers to fill you in on what you need to know. If you want to break away from the corporate grind and go into business for yourself, schedule a lunch with someone who has made a similar move to discover what it takes. You’re sure to get an earful of useful firsthand advice to implement in your business planning.  

Starting Your Planning Engine

As you interview industry contacts — or people with experience in similar businesses — follow these steps:

1. Prepare your questions in advance. With a little advance planning, you won’t forget to discuss something really important.  
2. Explain exactly why you’re asking for help. You can’t expect people to be open with you if you aren’t honest with them.  
3. Be prepared to listen. Even if you hear something you don’t want to know, listen anyway. Anybody who warns you about potential obstacles is doing you a big favor.
4.  Keep the conversation open-ended. Always ask whether you should be thinking about other issues or addressing other topics.
5. Build your network of contacts. Ask for introductions to others who may be helpful or for suggestions for sources of useful information.
6. Be grateful. Pick up the lunch or dinner tab. Write a quick thank-you note. Remember: You may need to turn to the same people later for additional advice or help.  

Sharing the load

Unless you want to feel overwhelmed and burdened, you need to identify the key people who can help you during the business-planning process:

·         If you’re in business on your own, chances are you have to shoulder most of the business-planning efforts yourself. But that doesn’t mean you can’t enlist the help of friends or colleagues to read over what you’ve written and tell you whether it makes any sense. Outsiders bring a new perspective to your plan. Just remember one thing: You need honest opinions, so make sure the people you choose feel free to praise and criticize. The last thing you want is a yes-person giving you guidance.

·         If you’re part of a business team, enlist the help of others in your company. For one thing, people with different backgrounds have different perspectives that add breadth and depth to your business plan. What’s more, by involving key people in the planning process, you ensure that they have a strong stake in getting results after you finish the written plan.

·         If you’re in a big company, you may delegate a lot of the work involved in creating and writing a business plan. Some companies even hire consultants to handle parts of the process. The downside of sourcing the work to outsiders is that you may end up with a plan that doesn’t really reflect what’s happening in your company. Worse yet, you may fail to win the commitment of the managers who are ultimately responsible for putting the plan into action. To get inside, make sure that your senior management team plays a central role. The marketing team, for example, may be charged with writing the company-strategy section, and the Chief Financial Officer (CFO) is an obvious choice for completing the financial review. And think about asking someone in corporate communications to write a crisp, clear, to-the-point executive summary (but wait until all the other parts of the plan are completed and ready to be summarized). 

Staying on track

If you intend to delegate, you can use this form to keep track of who’s in charge of which business plan component and when it’s due. If you’re planning all by yourself, you can use the form to track your progress.When you enlist help in putting together a plan, you’re probably asking the people around you to take on more than their usual workloads. To avoid overwhelming the office, create a reasonable schedule for getting the work done. And to keep everyone motivated, share the importance of the planning process. If you’re asking people to put in overtime, reward them for their efforts. A dinner out to celebrate important milestones in the planning process can go a long way toward keeping enthusiasm high. Because business planning involves a lot of brainstorming, discussion, vision, and revision, it generates a lot of paperwork. To keep track of it all, name one person to be the keeper of a loose-leaf notebook containing all the materials related to your plan. If you’re on your own, that person is you. If you’re heading up a planning team, make sure to assign a person who’s a natural-born organizer. Finally, consider using business-planning software to help you through the process. All sorts of tools are available — from freeware and shareware programs to full-service commercial software.