Entrepreneurship. Rhonda Abrams
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the management section of a business plan with special scrutiny. Your business plan must inspire confidence in the capabilities of your management, so you should put your management team together carefully.
■ Attract, motivate, and retain employees. A company is only as good as its people. The ability to attract and retain outstanding employees and managers is crucial to a company’s long-term viability and competitiveness. Your company’s reputation for treating employees well directly enhances both the number and the quality of job applicants and your company’s ability to retain employees once hired.
■ Take control of your finances. Key to any business is the way it handles money. Not fully anticipating start-up costs can immediately place impossible pressures on a new business. And poor cash flow management can bring down even a seemingly thriving enterprise. Things always take longer and cost more than anticipated. Build financial cushions into your plan to allow for unanticipated expenses and delays.
■ Anticipate and adapt to change. Change is inevitable, and the rate of change grows ever faster. In today’s world, your company needs to anticipate and quickly respond to change, and also to train its employees to be adaptable. Nimble companies that can quickly evaluate and respond to changing conditions will most likely succeed.
■ Emphasize company values and integrity. Every company must make money. You can’t stay in business unless you eventually earn a profit. However, studies of business success have shown that companies whose management is driven by significant goals in addition to making money (such as social goals, the drive for innovation, or the desire to create a great place to work) succeed better and survive longer than companies whose sole motivation is monetary.
Business planning tools from PlanningShop
A business plan outlines your business strategy and describes your competition, market, staffing, future developments, and the steps necessary to achieve your results.
PlanningShop has created the definitive guide to business planning. Successful Business Plan provides you with everything you need to know to write a fool-proof, perfectly formatted business plan. First published in 1991 and referred to as “the entrepreneur’s bible,” it’s the best-selling business plan guide in the U.S., used in the nation’s top business schools, and by over two million entrepreneurs.
To speed up your business planning process, PlanningShop also offers a Business Plan Financials package, which goes hand in hand with both Successful Business Plan and this book. These financials make it easy for you to fill in and complete your financial statements, formatted to professional standards. Visit www.PlanningShop.com to order the book and to instantly download the Business Plan Financials as an Excel spreadsheet. Visit www.BizGear.com for the cloud-based version of these financials.
As you develop your business plan, keep in mind those values you wish to express or achieve in the company you’re creating or expanding. These values can be aimed externally, at achieving some business, social, or environmental goal, or they can be aimed internally, at achieving a certain type of workplace or quality of product or service, or both.
What Goes into Your Plan?
Your business plan includes the following basic components:
■ The executive summary. Highlights the most important aspects of your business, summarizing key points of your business plan.
■ Company description. Features the basic, factual details about your business, such as your legal status, ownership, products or services, company mission, and milestones achieved to date.
■ Industry analysis and trends. Evaluates your industry and shows potential investors that you understand external business conditions.
■ Target market. Identifies the types of people or businesses most likely to be your customers, details the size and trends of that market, and explains their needs and wants.
■ Competition. Evaluates other companies offering a similar product or service or filling a similar market need.
■ Strategic position and risk assessment. Differentiates your company from the competition. It shows where you stand in the marketplace, what makes you compelling to customers, and what advantages you have over the competition.
Putting in your Appendix
Your business plan should be as brief as possible, so keep only essential information in the plan itself. Put other supporting information and details in an Appendix. But remember:
■ Your plan must stand on its own, without the Appendix
■ Only include an Appendix if the added information is compelling
■ Keep it short
■ The Appendix shouldn’t be longer than the plan itself
■ Marketing plan and sales strategy. Outlines how you’ll reach your customers, convey a positive message about your products or services, build a brand, and secure orders or make sales.
■ Operations. Explains how you run your business and actually produce your goods or services, and outlines the day-to-day factors that may give you an edge over your competition.
■ Technology plan. Outlines what technology you’ll use and how you’ll use it.
■ Management and organization. Describes the key people running your business and how your company will be structured from a personnel point of view.
■ Community involvement and social responsibility. Details your company’s values and how you’ll act on those values; identifies how you’ll be a good corporate citizen.
■ Development, milestones, and exit plan. Shows where your business will be in several years’ time, how you’ll get there, and the milestones you plan to reach along the way; indicates potential strategies for making liquid the financial investments in the company.
■ The financials. A set of financial statements showing the current financial status and future predicted income and expenses of your company.
When evaluating a business plan, experienced business plan readers generally spend the first five minutes reviewing it in this order: first, the executive summary; second, the financials; third, the management section; and next, the exit plan or terms of the deal, if applicable.
The executive summary is the most important portion of your business plan if you’re seeking financing. Only a clear, concise, and compelling condensation of your business right up front will persuade readers to wade through the rest of your plan. No matter how beneficial your product, how lucrative your market, or how innovative your manufacturing techniques, your executive summary alone must persuade a reader to spend the time to find out about your product, market, and techniques.
Your company mission
To help clarify your company’s position and focus as part of the business plan process, define a Statement of Mission. This Mission Statement should guide your company’s short-term activities and long-term strategy, position your marketing, and influence your internal policies. You’ll include your Mission Statement in the Company Description section of your business plan.
A Mission Statement concisely describes the goals, objectives, and underlying principles of