HOT TOPIC Putting together a Business Plan

[FT1]

Hey guys... :smx19:

I'd appreciate your help in the are of business plans. Please share tips and info on properly putting together a business plan, your view on the importance of having one and any books, resources or services to aid in development of a solid plan.

Thanks!

Fred

 

[WheelsRCool]

Can't give much advice on this, but some books that seem to be very good could be "The Successful Business Plan" by Rhonda Abrams and also in the book "The Portable MBA in Entrepreneurship," there is a chapter that goes into a lot of detail regarding writing a business plan.

 

[kimberland]

Why are you drafting up a business plan?

Is it for internal use (start up planning)?
For funding?
If for funding, what kind?

Different targets have different needs.

I've drafted more than my fair share.

 

[LamboMP]

What type of business are you starting?

I think a business plan is a great idea even if your not going after funding for your business. It can shape and structure ideas in a systematic manner so that when your starting to put the wheels in motion you have instructions on how to get going.

MP

 

[FT1]

It's for internal use.

 

[Russ H]

FRed-

Our last business plan got us an $800,000 SBA loan in less than 21 days.

To start out, we use BizPlan Builderby JIAN.

It has templatees, and walks you through the process.

We then add our spreadsheets and other analyses.

The format also makes it easy to update (which we do to all of our businesses, at least once a year)

Highly recommended-- both the software, and developing a business plan.

-Russ H.

 

[FT1]

Thanks for the replys. Much appreciated.

Fred

 

[MJ DeMarco]

None of my businesses have had business plans other than various notes and gibberish written on napkins and notepads.

However, As Kim mentioned, you can't get start-up funding or investors without one.

I've found that your idea of business at the onset is entirely different than how it ends / moves forward. Over time, your business ultimately morphs into something different as envisioned in the business plan as the result of consumer feedback.

If you read success stories of many entrepreneurs, they often say "We wanted to sell Product X and ended up selling Product Y.

MJ

 

[Russ H]

I've found that your idea of business at the onset is entirely different than how it ends / moves forward. Over time, your business ultimately morphs into something different as envisioned in the business plan as the result of consumer feedback.

Exactly my point.

A business plan is not static

It's a living thing.

It grows with you, as you learn and your business changes.

You revisit and revise it often.

I never had a business plan for my first ventures.

Have had them since 2003.

Well worth the time and energy spent.

Excellent way to refine, focus and flesh out your ideas.

(and lenders* love 'em )

-Russ H.

*Much of my acceleration these past 4 years has been due to using OPM (other people's money). "Other people" tend to like business plans.:smxA:

 

[thecoach]

Not sure if you found what you needed from the links above, but here's my method for a simple business plan, especially if it's just an internal one to keep things somewhat on track. Sometimes people go over board with these 20 page business plans and forget half the stuff in them.

I use the SWOT method: Strengths, Weaknesses, Opportunities, Threats

1) List out the strengths of your business and how you plan to take advantage of those strengths.

2) List out the weaknesses in your business and how you plan to improve those weaknesses.

3) List out the opportunities for your business and how you plan to take advantage of those opportunities.

4) List out the threats to your business and how you plan to build up a defensive plan to combat those threats.

5) Choose 2 or 3 items from each catagory and create and action plan with specific goals to maintain your plan and how much effort (high, medium or low effort) vs. reward (high, medium, low impact) these things will give you. Also enter in your realistic income/revenue targets and break it down to managable goals (quarterly and monthly).

Depending on your business needs this will shorten your business plan to 2 pages of direct plans for what you need. Might be an easy start if it's your first crack at a business plan.

 

[Yankees338]

Not sure if you found what you needed from the links above, but here's my method for a simple business plan, especially if it's just an internal one to keep things somewhat on track. Sometimes people go over board with these 20 page business plans and forget half the stuff in them.

I use the SWOT method: Strengths, Weaknesses, Opportunities, Threats

1) List out the strengths of your business and how you plan to take advantage of those strengths.

2) List out the weaknesses in your business and how you plan to improve those weaknesses.

3) List out the opportunities for your business and how you plan to take advantage of those opportunities.

4) List out the threats to your business and how you plan to build up a defensive plan to combat those threats.

5) Choose 2 or 3 items from each catagory and create and action plan with specific goals to maintain your plan and how much effort (high, medium or low effort) vs. reward (high, medium, low impact) these things will give you. Also enter in your realistic income/revenue targets and break it down to managable goals (quarterly and monthly).

Depending on your business needs this will shorten your business plan to 2 pages of direct plans for what you need. Might be an easy start if it's your first crack at a business plan.

How do you differentiate strengths from opportunities and weaknesses from threats?

 

[thecoach]

Strengths are more of personal strengths (or team strengths if you have a team of people), like being outgoing, having a large network, 20 years experience in your industry, specialized knowledge in a certain field.

Opportunities are opportunities that you can take advantage in your market/industry, like no competion in a given area, an industry that has never been exposed to the products/services you provide and you have an in there.

A weakness is almost more of a personal weakness that hinders your progress, like you are deathly shy, you have a small network you can draw upon, lack of knowledge in a certain product or target market, etc.

Threats are mostly external threats, like competition, market conditions, small local market base, etc or they can be internal threats like your assistant of 20 years is going to be retiring in a month and you need to replace her.

 

[Yankees338]

Sorry...typo. Edited my post though.

 

[thecoach]

edited my reply to your edited question Does that answer your question?

 

[Yankees338]

edited my reply to your edited question Does that answer your question?

Yes it does! Thank you! I definitely like this idea, but I feel that a business plan should be a little bit more in-depth if it's going to be the backbone of your idea. I think this would be better suited as a section of a bigger business plan, but hey, that's just me. If you are just trying to analyze an idea, I think this is great. If you're trying to propose an idea to potential investors or you are applying for a business loan, I think something much more in-depth would be a necessity. I'm not sure exactly how you use this, though...w hatever works for you!

 

[thecoach]

I agree. If you are meeting with someone that is about to invest a million bucks in your idea, you might want something with a little more detail. This is what I use as an internal annual business plan that I review at least quarterly. Just as a quick reference to see if I'm on track or if I need to adjust some ideas. I've also used large plans that are roughly 15 pages long if I need to impress someone like if I'm applying for funding, etc.

 

[TNT]

When I was working on my MBA we always worked off the SBA (Small Business Admin.) site. It has the basics for the different Business plans and how to use them. all the info is free. Plus this is the guildlines most investors and lenders use to evaluate the plans.
www.SBA.gov

 

[RE Taipan]

Here is a link I have found useful in the past...

http://www.canadabusiness.ca/ibp/home_en.cfm

It is from the Canadian govt., an online, interactive small business plan template which allows for you to plan out 3 years.

Not the ideal thing, but it does have some financial forecasting that allows you to play with different financial scenarios. Also, if you have never done a business plan, it provides a basic framework to work from to develop your own.

Note: if the link there does not work for some reason, do a Google with "business plan" and "canada" then look for the URL that includes www.canadabusiness.ca

 

[AroundTheWorld]

okay.... I know I'm off my rocker here....

I have an allergic reaction to business plans.

YECH.:frocket:

Ya, ya.... I know they are required for VC's or Angel Investors and *sometimes* banks... yada, yada...

but I like to operate by KISS (Keep It Simple, Stupid)

I would venture a guess that a majority of people that write a business plan spend a lot of time tweeking a template, use it to obtain cold hard cash, then shelf the thing..... to be looked at again maybe twice... or when more funding is needed.

Don't write a business plan just because it is in all the start-up books about the next step to take... particularly if it is for internal use.

Now, don't get me wrong... I'm not saying you shouldn't be:

• Informed about your market and competition
• Have a Goal
• Have a Plan to reach the Goal...

What I am saying is put this info in a format that you will use... put it in a format where it will truely become the backbone of the company....

Make a Mantra and hang it on the wall.
Come up with benchmarks and goals.... and put the FIRST benchmark somewhere where it is visible by all....

Typical business plans are what??? 20, 30, 50 pages long?? And.... you want how many people to read that?

Wittle it down to the 5 most important things - get those pages OUT OF THE PLAN and INTO YOUR BUSINESS.


(oh, and I have obtained 4 major commercial RE loans in the last 12 months.... and only one was obtained with a full blown business plan)

 

[briangmu]

The hardest part for me has been the financial information. I'm working on my business plan now, and for me its hard to make a "finger in the wind" prediction on how much we'll make 1, 2, and 3 years out. I've gone to SCORE and the Business Advisor group at the college I graduated from for help in this area... they've been a great resource.

The software I started with was from Palo Alto.

 

[briangmu]

One other thing for those who hate business plans...http://blog.guykawasaki.com/2007/06/no-plan-no-capi.html

A great session with a few big names and lots of good insight.

 

[Russ H]

Sonya-

If you use a software program (like JIAN's Biz Plan Builder), you can do a *very* thorough business plan in one evening.

I know enough about you and family to say: Get past your fear/misconceptions about Biz plans, and do one.

And plan on revisiting it as often as necessary-- we update ours several times a year.

Biz Plans are actually a core part of our overall PLAN-- they're some of the building blocks.

Biz plans *may* be written to impress someone else (like a lender), but we always have a less fluffy version that we use internally.

They really are worth it.

I can't stress that enough.

Before we did one, I thought they were a waste of time.

Because I didn't understand them, and my lack of knowledge made me avoid them.

The fastlane is all about learning new things that will take you farther, faster.

About trying things that most folks are afraid of.

About not listening to the "crowd", but finding what works for you.

Most of us here attribute at least part of our success to planning, and focus.

That's all a business plan does.

Do a business plan. Do it well. But above all else, make it your own.

-Russ H.

 

[AroundTheWorld]

Russ,

I actually have done a business plan. And I did use that business plan to obtain a loan.... and then, I never looked at it again.

Well, that's not true. I was preparing for another commercial loan app. I looked at the plan. Said - YECH. Prepared my proformas and a little one or two page summary of the deal and took it to the bank... I obtained that loan... and went on to obtain 2 more in a very similar manner.

Go figure...

I think that for me, it is that a big ol' biz plan seems too cumbersome to look at.... let alone integrate, revise, blah, blah...

I'd rather have other ways to move my plan forward then the "formal" plan.

Having said that... I'll check out your deal... maybe it will knock my socks off :smx3:

 

[AroundTheWorld]

Most of us here attribute at least part of our success to planning, and focus.

That's all a business plan does.

Do a business plan. Do it well. But above all else, make it your own.

-Russ H.

I guess that is the thing...

Asking the question - WHAT DOES THE BUSINESS PLAN DO???

Provides your business with focus.
Provides your business with a plan.

Then.... how can these things be done in the most efficient and effective way?

For me, Biz plan is not the answer to that question.

Instead - A Mantra or Mission Statement - and some benchmarks with specific steps to get there answers that question.

 

[Russ H]

We use the executive summary for most of our daily stuff. Perhaps it's just b/c our overall PLAN is so complicated that the bus plans for each of our businesses work well for us.

Here's the thing: It's easy for me to forget something when I'm planning.

The bus plan just helps me go through the planning process.

BTW, anyone who just uses a bus plan to get a loan, and then never looks at it again, didn't really have a business plan (in my eyes).

Because a business plan is for YOU, not someone else.

Maybe that's why some folks don't like 'em-- they were forced to do them, did them to get something (like funding, or partners), but never saw the relevance of the plan in their day to day operations.

I know Diane has some feelings about this. And she said she was searching posts each day for her name, to speed things up.

Diane?

-Russ H.

 

[AroundTheWorld]

Here's the thing: It's easy for me to forget something when I'm planning.

Still waiting with anticipation for your post about planning!

 

[Bilgefisher]

Still waiting with anticipation for your post about planning!

This makes me feel better. I was getting excited to see it as well. Glad I'm not alone.

 

[jackson992]

My business plan is deciding what affiliate programs to promote and having the products that people are actually searching for. Also finding the best way to present the products to my viewers to get the best click thru rate to my merchant's sites.

 

[Russ H]

ATW & Bilgefisher-

Here you go:

http://www.thefastlanetomillions.com/showthread.php?t=544

It's not the whole thing-- since it's taking more time than I figured to do (and since this is a long process), I posted the first 3 steps, which should keep most folks busy for a day or so.

More steps later on today.

-Russ H.

 

[Diane Kennedy]

Here's my shortcut to a business plan:

- If you can do the first three steps (vision, mission, values) with people who know you well, will be partners or key employees or contacts, that would be perfect. You can do it by yourself, but it's so much easier to do it in a group.

I've done this a lot lately, so this is how we've found it works best. Get your group together in a place where NO ONE is interrupted with emails, texts, phone calls, or anything else. Select a "blue hat" organizer to keep it on track. Hang up big pieces of flip chart paper (I like the "giant" stickie ones). Everyone gets regular yellow sticky pads and we also put out multi colored pens. (Helps with creativity)

- First figure out your "vision." It's the "why" you do this. For a lot of people, it's very closely aligned to personal goals, purpose, mission, etc. Unless you have this completely dialed in, start with key words. What is important to you? What do others observe is important to you? How do they describe you? A vision is something bigger than you are. It's what you achieve.

I found that the vision I came up with became the vision for all of the businesses I started. Once I got clear on my vision, the time waster biz ops became really easy to say "no" to. I highly recommend this step. What do you want to accomplish in the world?

Everyone has their own sticky pad note and writes down key words or phrases and then goes up to one of hte big white pieces of paper to slap them on the sheet. Once you've all had a chance to exhaust all the key words, start putting them together in a simple statement. You will probably wordsmith it throughout the day, but start with something. You'll often see common themes within a group. That's proof that you're on the right track. Write down the 1st Draft Vision on one piece of paper in giant letters and hang it on a different spot on the wall.

- Next up is "mission." It's the "what" of your business. So my Vision is to "Empower Individuals to Maximize Net Worth" but how does my CPA firm do that? How does Tax Loopholes do that? etc.... It's the practical operation of that particular business.

Again - go to the sticky note system. What does your business actually do? Come up with key words and phrases. This one will probably go faster. Come up with the 1st Draft Mission Statement, write it on a big piece of paper and put it aside (but where you can still see it)

- Finally is "values". This is the "how" of how your business works. I've also heard it called the Code of Conduct. Too many business owners skip this and then are puzzled when they hire people who don't have the same values. (That's why one of my key points in lessons in my story was "You can teach skills, not values.") It's amazing how much you often have to teach specifically what it means to be "honest." I've had people become absolutely astonished (genuinely so) when they were fired for stealing. They thought it was okay to take things from their employer that wasn't theirs. Go figure.

Come up with your values - transcribe them on to another big piece of paper.

**NOTE: Hang on to these papers and maybe even the sticky notes. When your business is a success, these will be great reminders for you. If you've ever been in the Rich Dad Scottsdale office you'll see one of the first designs for the Cashflow game on the wall. It's a great reminder of that exciting time in the start-up when you're wondering still if it will work.

Then, and only then, do I do the roll-up-the sleeves part of creating the full blown business plan. Russ has mentioned it a couple of times and I have in another thread as well - use JIAN's software. It's the best I've seen.

It doesn't stop there, though. We work toward creating the one page "control page" of vital stats on each business. These are updated weekly or monthly, in most cases. That way my controller can give me one page on each company and I can tell what's happening and get some leading indicators on trends. The business plan is multipages and vital (for me anyway) at getting me focussed on what exactly the business is about. I haven't ever needed cash to fund them. I'm not saying it's bad, it's just not my style - I prefer to bootstrap a business. And now that we have a little more wealth built up, we use our own cash.

But once I have the multiple pages for the business plan, I don't refer to it as much. It's more like the process on that anyway is more important than the final product.

The vision, mission & values (which go into agreements) and control panel are the most important things for me.

I did a one day workshop on creating your own business plan - starting with the vision, mission and values. We found that you could get the whole thing done, in most cases, within 8 hours.