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Start Business Planning
Start Business Planning: Much discussed, but little used One of the most talked about aspects of starting an enterprise is business planning, and it seems that everyone who talks about small business talks about it. But for some inexplicable reason, they don’t actually do it. They talk about planning, but they don’t plan. They somehow fail to see the VALUE of creating a plan for their business. Having a business plan is like a pilot creating a flight plan. The pilot determines his/her destination and then maps out a course to take. They know from that plan that they will be encountering landmarks, possible weather patterns, and because they have a plan, they can make the necessary adjustments along the way. They can CHANGE course if necessary. Let’s say while you start business planning you determine that you will need to sell 100 units of your product per month to break-even. Then, when you start operating your business, you sell 120 units of your product, but you’re a long way from break even. GREAT! You can now review your plan and figure out what aspect you were WRONG about and then CHANGE your approach so that you do break even and eventually make money. Very much the way a pilot re-routes his aircraft for bad weather.
That’s WHY you start business planning; to help set your direction but also to help CHANGE it if necessary! I’ve been around lots of small business owners and generally they’re completely unwilling to CHANGE their “vision” of their business, even if they loose lots of money. Why you ask? I think it’s because they have a FIXED idea of what THEY want to do and they think if they change that idea they will lose their footing and fail.
My experience is the opposite, the more you are willing to modify and change your business based on your plan versus operating reality the less likely you are to fail.
Creating a SIMPLE & USEFUL business plan
I’m going to use a real business as the case example to help you understand how to create a short but useful business plan. The business is called DK Designs, a custom jewelry designer in Northern Illinois. It’s owned an operated by Deanne Comp who, until recently, designed jewelry for fun and sold it to her friends and family. Deanne has now decided to turn her hobby into a business and is beginning to develop her plan. To start business planning Deanne needs to: - 1. Write a Mission Statement click here for link - 2. Define her Vision click here for link - 3. Define her product & manufacturing process click here for link - 4. Decide her sales; marketing and launch strategy click here for link - 5. Create her business and financial model click here for link
Words of Wisdom Once you complete these steps you are finally ready to jump in and start your business. I want to offer one word of caution. Let’s say you think things through, work the points on the checklist and after that planning you discover that your business will not be profitable for the foreseeable future. Don’t do it. You will lose a lot of money! I had a friend that asked me to review his business plan before he launched his product (an environmental news letter for Fortune 500 companies). After reviewing his plan I determined that he would lose $400,000 a year for the foreseeable future. He decided to launch his business anyway and ended up divorced and in financial ruin that he still (ten years later) hasn’t recovered from. Please don’t make the same mistake! If your plan shows huge financial losses you MUST change your vision or find another business. Also, if you create this plan, but then ignore it, you’ll likely end up unsuccessful as well. If things happen in your business that make you significantly deviate from the plan then RE-PLAN to make sure this is still a viable business. This sounds obvious but you’d be AMAZED at how many business fail because they aren’t following any plan.
What if you get stuck? What if you get stuck while start business planning? Don’t obsess about it, instead write down anything you can think of for that step and keep moving through the remainder of the plan. Many people write their business plan in two or three day (very quickly) and then they go back through it more slowly to refine it and add more detail. This may be how you should approach your plan. This helps avoid going into too much detail and keeps you focused on the strategic issues and out of too much tactical detail.
Try it you’ll like it! If there was ONE thing I could get you to do, one piece of advice I could offer you, one recommendation I’m giving you that you would actually follow, it’s to write your business plan before you spend ANY money! Good luck with using this site and with your business and start business planning NOW!!!
Now your ready to Finance your business: Click here to find out how to Finance your business
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