business startup

Successful Business Plan – Simple Techniques for Writing Your Own

The very first business plan I ever wrote was praised by the Small Business Development Center counselors and loan officers and immediately accepted and forwarded to the local SBA representative for approval. And no, I didn’t use canned software.

When I realized a business plan would be needed for my small business startup I scoured the Internet and read books and was so intimidated by all the required financial reports I put it aside for two years. But I knew a business plan was going to be a necessity if I was going to get serious about my business idea.

It took me only three weeks from beginning to end and was about 15 pages long. And it contained every single required report. How did I do it? I scoured the Internet for information. I did searches on business plans and compared several outlines against what was recommended at the SBA’s (Small Business Administration) web site. What I quickly discovered was that there was one generally acceptable format that contained very specific essay and financial reports.

At first glance it looked so daunting. But I was so tired of the corporate grind and I wanted so much to have my own business that I pressed forward. I took it one step at a time.

One of the required items was the business description. Within that section was to be a description of the competition. Easy. The reason I knew my idea was a winner was because there was very little competition in the immediate and surrounding area. I simply did a short write up describing those businesses and added a quick comparison showing how my idea differed from and improved upon those existing businesses.

That wasn’t so hard. Maybe I can do this. With newfound confidence I forged ahead to the next section. Marketing. More specifically defining my target market. Who was my customer? I was going after the wedding industry’s customer base. So I hopped on the Internet and went to the census bureau’s site www.census.gov and did a search for marriage statistics in my state. From that I was able to determine how many people had gotten married in recent years. I wrote a few paragraphs about that info.

Two sections down with just a few more to go. It wasn’t such an insurmountable task after all! I realized the essay portions could be written in such a way that I was able to summarize my information into a few concise paragraphs for each section.

The secret to the essay portions was to use an exciting voice with very descriptive adjectives. I wanted to grab the reader’s attention and see why I was so excited about this business. I especially took great care to write the Executive Summary as a brief, but stimulating and provocative attention grabber. (It is extremely important to hook the reader from the get go so they continue on with the rest of the plan.)

The financial statements were just as easy to tackle. The first thing to do was the assumptions. To do that I simply took the selling price of my service (or product) and determined how much I would make in sales per day, week, month and year. That basic information was the basis for the remaining financial reports.

For example, the Cash Flow Statement is simply a detailed “budget”. You take your monthly sales assumptions and add any other incoming “cash” (loan dollars for example) and subtract your expenses. Carry over any extra (or loss) to the next month until you have populated the statement for 12 months. Voila! Another section completed.

Three weeks from start to finish.

When it was completed I took it to the local SBDC office (usually housed in community colleges) for their review and advice. They were floored that I had completed it myself without software. And better yet, they loved it so much they said it was good to go. They suggested local banks that were favorable to start ups and off I went.

The loan officer was equally as impressed. She said that she normally did a quick glance and rarely read entire plans, but was so captivated by the opening Executive Summary that she asked me to wait while she finished reading. She immediately agreed to forward it to the SBA representative for approval. That was an exciting moment indeed!

Why didn’t I just use a template or ask the SBDC or SCORE folks to do it for me? Because it was my baby. I was going to ask for funding from a bank and I felt that I needed to be aware of every minute detail of the plan. This way I could, with full confidence, defend the data should questions arise. I also reasoned that if I couldn’t get this one item taken care of, then maybe I had no business being in business for myself.

Don’t let this one item keep you from realizing your dream. You can do it too!

Sylvia Talo has authored the step-by-step manual, “You Can Write Your Own Successful Business Plan”, now featured in the One Stop Business Start Up Kit. Visit her web site http://smallbusinessstartup.biz a one stop site to help you start your own small business.

Filed Under: Business Plan Tagged With: business plan, business startup, how to write a business plan, small business resource

Business Planning for College Students and First-Time Entrepreneurs

More and more students, both in undergraduate and graduate institutions, are deciding to launch their own ventures upon graduation rather than taking the traditional route of working for another firm. Likewise, more and more individuals are leaving their jobs to fulfill their entrepreneurial dreams.

While these ventures may ultimately be very successful (e.g., Google and Microsoft were both launched by students), they face certain challenges in their business plans and capital raising processes. The foremost challenge is overcoming the lack of experience of the management team. A classis chicken-and-egg problem presents itself – the management team has no past company successes to point to, and can’t prove itself unless given the opportunity to launch the business. While this problem is nearly always the case for graduating students, it also presents itself to many entrepreneurs, particularly those who are launching their first ventures.

To overcome this challenge, these ventures must represent themselves as having a great team by attracting a stellar management team and/or advisors. By attracting a quality management team, even if the team will not start until after financing, it gives investors that confidence that the plan will be properly executed. It also proves that the entrepreneurs have the ability to “sell” others on their vision. The management team need not be complete before seeking capital, since additional members will most likely be added after capital is raised. For instance, shortly after Google raised capital from Sequoia Capital and Kleiner Perkins Caufield & Byers, Omid Kordestani left Netscape to accept a position as vice president of business development and sales, and Urs Hölzle was hired away from UC Santa Barbara as vice president of engineering.

Attracting high-quality advisors builds great credibility since if respected individuals are willing to risk their reputations by taking an advisory position, the venture must have some merit. Advisors can also help with the execution of the business and sometimes will also provide the needed capital. In Google’s case, when no major portal was interested in partnering with or funding the company, Larry Page and Sergey Brin were able to convince Andy Bechtolsheim, one of the founders of Sun Microsystems, to become an advisor and investor. Bechtolsheim contributed the initial $100,000 to the company.

Even if the venture is able to attract quality management teams and advisors, it will always be at a disadvantage versus other ventures headed by entrepreneurs who have “been there, done that” successfully in the past. To compensate for this, these ventures must really know their customers, know their market and know their competition. By possessing an in depth knowledge of the external factors that will effect the company’s success, the entrepreneurs can both create a solid business strategy and convince investors that an opportunity really exists. If the opportunity truly exists, then investors know that even if the venture is initially mismanaged, then they can hire additional managers later to put it back on course.

In summary, when students or first time entrepreneurs, begin developing their business strategies and plans, they must compensate for the management deficiencies they possess versus established entrepreneurs. By doing this and showing a comprehensive knowledge of their market, these ventures can level the capital raising playing field. Fortunately, these ventures can point to a long list of other successful companies which were launched by students and/or first time entrepreneurs, most notably Google and Microsoft.

About the Author

As President of Growthink Business Plans, Dave Lavinsky has helped the company become one of the premier business plan development firms. Since its inception, Growthink has developed over 200 business plans. Growthink clients have collectively raised over $750 million in financing, launched numerous new product and service lines and gained competitive advantage and market share.

Filed Under: Business Plan Tagged With: business startup, small business

Let Your Survey Write Your Business Plan

Most entrepreneurs first write their business plan and then develop their
services or products. This causes them to generate and fulfill a marketing plan
that requires them to swim upstream using the backstroke. To save the stress,
consider placing the business plan on hold until first completing a few customer
surveys. Okay, some of you are saying, “Catherine, how can you do a survey
before you know who your market is?” Yes, this is one challenging double edge
sword, that is, if you’re mindset is set there.

Over the years, I’ve found that everyone I’ve worked with generally knew what
he or she wanted to sell. I don’t believe you are any different. This is the
perfect place to start. You have a clean slate to write on. You might be at a
place of seeing it in nonspecific terms with measurable doubts as well. That is
okay, doubts will always be there, thus, allow them to be your friend instead of
a foe. It’s easy to start with a gender preference — choosing either women or
men as having a higher purchasing balance for what you are selling. If you don’t
have a majority gender in mind, choose the one you feel most comfortable talking
with or asking questions to.

Let’s dive in a little deeper, its time to start thinking about your surveys
and what to ask. Okay, don’t fade out on me now. Generally, when people think of
surveys, they visualize or experience the sensations of long drawn out processes
that cost more money then they can afford or time that they don’t have the
patience for. Boy, do I remember those days of thinking.

Let’s play together on this concept of taking surveys before writing your
business plan. At least, allow the old perceptions to sit outside your door
until you’ve finished reading this article and learning of a new possible
alternative perspective. The perspective that surveys come first and don’t need
to be time-consuming, money-hungry, must be done by professionals, mongrels.

Take the area you want to focus on, combine with your gender preference, and
begin there. For instance, if your area is life coaching and you feel more
comfortable with working with women you have a starting point. This doesn’t mean
you will never coach men, set those thoughts aside; they will block your
progress and keep you stuck.

From knowing just this basic information, you can now create a few simple
surveys in no time at all that don’t require any money. Even if you know more
specifics about your buyers, you might want to back it up to this point if you
are stuck in generating questions. To generate this survey plan you don’t need
to know whether your focus is for a product or service, or even if its for
electronic, telephone, or in-person delivery, at this time.

The first question you want to generate and ask is what your gender wants to
buy next. If asked in narrow terms, they will answer. If asked too broadly, they
will respond with “don’t know.” If the latter, rewrite the question more
specifically, then ask again. Whenever I start, I sometimes have to revamp my
questions five or six times. Just an FYI, to help you understand that even the
experts refine as they go. Surveying is an evolutionary process.

A second survey question is for people who have purchased from you in the
past. What are looking for next? What do they want to accomplish in the next few
months or whatever future terms they desire to talk about?

If you don’t have any customer history, then substitute. Open the scope to
what is the gender buying? What is the cross between what you offer and what
they want? What do they want to do next (short-term) that falls within your
scope?

Continuing with the life coach illustration, what type of women, what age
areas, what type of self-development or improvement topics are they purchasing
now? What is the regular step past this? What “new” hot topics in the
marketplace that meshes with your area? If you attend a workshop, conference or
seminar, examine the topic, and take notes on the type of women attending.
Record or ask their age group. Ask a few to complete a survey while they are
there.

Ask one way, then another, and create a list of no more than six multiple
choice, yes or no, questions to ask. Then continue to ask with whomever you
meet, wherever you go. Talk with the workshop leader or conference marketing
people and find out who they were targeting and why. If the event is a match for
you, collect copies of all their marketing materials for language learning.

Ask friends, family members, or colleagues. Even if they don’t think these
groups fit within your current focus. Just remember not to stay off focus when
doing so. If you attend a coaching school, ask other coaches that do what you
want to do. What are their clients into, what are they selling them or what
ideas have their clients told them that they are looking for?

Your survey method you use is up to you. To ease into it, you will want to
ask in the form most comfortable for you at the time. However, caution, most
everyone chooses written form first in order to avoid any negative responses. In
a B2B survey, negative responses never occur. Everyone knows why a survey is
important. In B2C (business to consumers) be careful not to cross the line of
interrogation or too personal. Ask politely, with respect, and share why you
want to know.

The number one rule of getting survey responses — is KISSing the questions
– “keep them short, simple and as specific as you can at the time.” Special
note: Don’t use the contraction and in your sentences. The contraction “and”
creates a multiple question, stacks questions, which confuses readers and
listeners on what you really asking.

As you go through the experience of completing your surveys, new clarity will
flower. The gender equation gets more specific, the age group narrows, and the
rest unfold. One industry category might begin to show you where there is
greater revenue generation. Allow the data to drive you towards the right
direction. Don’t try to control or drive it yourself. That struggle will cost
you dearly.

If you’re survey request is in the form of writing, you can offer something
in return for an exchange of their time. Usually saved for longer surveys, you
can create a reward for short surveys too. It’s its too early in your survey
process to know what prospects want, offer something generic. Match the gift
with the amount of time it takes them to complete the survey. If this is the
case, offer something generic. Offer a $5 gift certificate from Amazon.com. If
local, ask you’re favorite restaurant if you can offer a discount coupon that
they will honor. There is some fr*ee portion to the amount donated on the
restaurant’s part because it increases their clientele list.

It’s time to survey. Allow patience, time, and you will want to schedule this
as a regular routine in your business. Next, plan your services and products to
meet those needs and then generate your business plan around them.

Catherine Franz, a Professional Marketing & Writing Coach, specializes in
product development, Internet writing and marketing, nonfiction, training.
Newsletters and articles available at: www.abundancecenter.com blog: http://abundance.blogs.com

Filed Under: Business Plan Tagged With: business plan, business startup, how to write a business plan, small business

19 Questions to Supercharge Your Business Plan

Whether you are seeking capital for your company or are optimizing your
business strategy, the most important element – particularly for outside
investors – may be your written business plan. You can tune-up and supercharge
your plan using this 19-step checklist. When your written plan firmly answers
yes to each of these 19 questions, your market/product strategy is in terrific
shape plus you increase the odds of attracting investment capital.

If you don’t already have a written business plan – write one! Your business
plan is a blueprint for your whole company. It describes in detail your goals,
the financial and technical viability of your goals, and the strategy you will
use (or are using) to reach those goals. And your business plan is a working
tool – it is a yardstick to measure your progress and a compass to keep you on
course.

Must a business plan be written?

Yes! A plan which is not written usually has not been thought through fully.
And despite what you may have read, it is doubtful that any business ever
attracted capital on the back of a napkin.

Use this checklist as a way to identify where your strategy, as spelled out
in your business plan, needs work. Each of the questions below highlights an
area considered critical to technology investors.

1. Can the key ideas behind your product or service be stated in one or two
sentences? (y/n)

2. Does your company have at least one unique and compelling competitive
advantage, which cannot quickly or easily be duplicated? (y/n) Examples are a
special feature, a cost advantage, a technical refinement, a new delivery system
or a special supplier.

3. Is your competitive advantage proprietary? (y/n) That is, can it be
copyrighted, patented, trademarked or otherwise protected? Can you keep it
exclusive to you?

4. Is your industry segment growing by 25% or more? (y/n) If not, can your
new product dominate its segment? If the answer is no, you probably won’t be
able to generate the kind of financial returns investors look for.

5. Does your product or service create a new market? (y/n) Although generally
positive, this could be a trap – in a brand new market, the potential can be
slow to develop. Lotus Notes created a new category but took years to create
value for investors.

6. Is your market in “early momentum” – the market growth phase where market
revenues have recently taken off? (y/n) Venture investors prefer markets in this
stage because the time-to-create-value is shorter and the growth potential still
large.

7. Is your target market segment 1) tightly defined over a population sharing
common characteristics, 2) large enough to support significant profits, 3)
served by communications channels to reach that market – i.e., trade or special
interest publications, response mailing lists? (y/n)

8. Is your company filling a gap in the market, or do you have a “gee-whiz”
product which you think is so terrific that customers will surely want to buy
it? (y/n)

9. The benefit of your product or service to users is 1) significant, 2)
quantifiable and 3) cost-justified? (y/n). If you provide a benefit which is
important, and you can prove it – there is a much higher probability of
generating sales.

10. Is there a demonstrated market for your product? (y/n) If you have an
existing product, is your customer base expanding? Investors would rather fund
sales and production than product development.

11. Is there wide appeal for your product or service? (y/n) Are there enough
potential customers in the target market that you can earn significant profits,
for a long time? Are there follow-on products to sustain revenue and profit
growth?

12. Does your company have the ability to sell your product? (y/n)
Particularly in companies where the founders have technical backgrounds, a
question to ask is “Who is going to sell your product or service?” What about
outside distributors?

13. Is there an experienced management team? (y/n) Investors would rather
fund a solid team instead of one lone genius with a great idea. The team should
be highly qualified in marketing, sales, finance, and the product/service area
itself. Of course, a demonstrable track record helps.

14. Can you demonstrate a likely return of 5-15 times investors’ capital,
over a period ranging from three to seven years? (y/n) The actual parameters
used by venture investors will vary based on which stage you are in (idea,
startup, development, expansion, turnaround).

15. Is there a clear exit strategy for investors? (y/n) The most common
strategies for returning investors’ capital are 1) going public; 2) acquisition
of your company; 3) new investors; 4) founder’s buyback or management buyout.

16. Have other investors already put money into the company, particularly the
senior management team? (y/n) This reduces the apparent risk, reduces overall
exposure, and shows that management “has its money where its mouth is.”

17. Have you clearly defined a structure for the investment you seeking?
(y/n) The structure should include: who is involved, how much capital is needed,
what minimum investment you will accept, how much equity that will buy – and, of
course, the projected return on investment.

18. Are your financial projections realistic? (y/n) Have you soundly
justified your projected growth rates and other financial assumptions?

19. Have you clearly examined the risks? (y/n) Investors like to know that
you have considered the risks. This is key – can you turn your risks into
opportunities?

Too many no’s? Remember, each “no” opens up an area for you to strengthen
your business. Even if you aren’t seeking capital, each question highlights a
critical success factor – which, when mastered, will increase your profits, your
performance, and your future success.

In order to help you discover hidden value and opportunities in your
existing business, and to make it easier to spot potential problems while you
are just starting out, I’ve created the Discover Hidden Value Business Building Guide. A remarkable aid
to accelerating the growth and profitability of your business, this program of
insight-provoking questions and checklists enables you to rapidly diagnose,
troubleshoot and optimize every part of your business, from marketing to sales,
customer service to product development and finance to production.

About the Author

Paul Lemberg’s clients call him “the unreasonable business coach” because he
insists they pursue goals and take actions far outside their comfort zone to
make more money than they previously thought possible. To get business
coaching tips, tools and strategies like these, visit www.paullemberg.com.

Filed Under: Business Plan Tagged With: business plan, business startup, how to write a business plan, small business management, small business resource

Becoming Wise – Wild & Free – Writing A Successful Business Plan

So you’ve decided to write your own business plan because you know the value that the experience will give you. With the books and software that are out there today you can probably sit down and complete the plan in a day or so, right? Plug in the numbers, add the notes, write the whole narrative (story), print it and get it out to the banks or investors.

If you can complete a plan in a day or so you are either an expert, that has already done all of the research, or you are heading for big trouble, because you have not done enough research. If you are like most people you have a job, a family and commitments that take up a lot of time. It would be impossible to write a business plan that quickly, even if you know your stuff. You have probably heard the old adage, ‘Rome wasn’t built in a day’ well, neither was a good business plan. To create a top quality business plan you need to research each and every aspect as diligently as possible. Take your time and think of everything, don’t leave anything to chance.

That sounds like a lot of work and a long drawn out process. How will you remember or even think of everything? How can you keep track of what you have to research? If you have to set your plan aside for a while, how will you remember where you left off? You may get tired, bored and even careless in your efforts because like most people you probably have Attention Deficit Disorder when it comes to doing this type of work.

The answer is to do your plan in steps. A good guide book or business plan software will ask you to complete work as you go, one step at a time. You read a section, do some research on the items(s) in the section and enter the information that you discovered. This way you are focused on each item as you go and never become overwhelmed. You will also be able to remember where you were when you have to set the plan aside for a few days, without having to re-read a novel. The process may still seem long but if you concentrate on doing your plan in steps it will be done before you know it.

This series of articles has been written in steps because most people don’t have the time to sit down and read a novel. You can even do your financial projections in steps, which is where I recommend that you start. Doing the projections will help you analyse the feasibility of your project before you spend a ton of time writing a complete plan that may or may not work for you.

About The Author
Written by Rod Francis – President of Advantage Venture
Systems Inc. creators of the Venture Planning System(tm)
Pro business plan software @ www.VPSpro.com
Suite 207, #1-1081 Central Ave. N.,
Swift Current, SK Canada S9H 4Z1
Check for more articles on writing a business plan at:
www.vpspro.com

Filed Under: Business Plan Tagged With: business plan, business startup, how to write a business plan, small business resource, start a small business, starting a small business