board of directors or other advisers who want to offer their support
Outside consultants you hire to help out with specific issues
Bankers who decide to lend you money or shut you out
Investors who show interest in taking a stake in your company
The general public in your community who might have an interest in your activities
All these constituents have their own special reasons for wanting more information about you. Each group is probably interested in a different part of your plan. A well-written business plan satisfies all these groups and makes your company stronger in the process.
Taking the first step
With so many people to keep in mind and issues to think about, you may be feeling a little overwhelmed. Well, we’re not going to sugarcoat this: Business planning does take time and effort. But if you’re excited about the business you’re putting together, the process can be a lot of fun. In fact, maintaining your sense of excitement and enthusiasm and making sure you reflect it in your business plan is important.
What you want to do
How you plan to do it
Who your customers will be
Why they should come to you and not the competition
The number one reason you’re convinced that this business will succeed
After you finish, be sure to drop the doc into several different files so you don’t accidentally delete it. For more information on describing your business in 50 words or less, check out Chapter 4.
Understanding the Planning behind the Plan
Some companies think that planning is a total waste of time. They would never think of using the term in the context of their own organizations. These companies still move forward; they just don’t talk much about it ahead of time. So why does planning have such a bad reputation in certain quarters? One reason is that far too many organizations simply go through the motions rather than taking the exercise seriously: Someone high up read somewhere that having a plan looks good to an external audience, so the firm commissions one and then promptly forgets about it. More than likely, the companies that don’t plan don’t understand what it really means to plan. Planning has become such a buzzword in today’s business world that its real meaning has been lost.
Is planning an art or science?
Planning is both an art and a science. Putting together a serious business plan requires you to gather data, analyze the information, and then turn it into knowledge about your situation. A serious business plan requires that you think strategically. What do we mean by that? The word strategy comes to us from the ancient Greeks and translates literally as the art of generalship. So it shouldn’t be surprising that when you start thinking strategically about your business, you feel that you’re suiting up for battle and jousting with your competitors for the hearts and minds of customers (to say nothing of their wallets and purses).
You clearly describe how to reach the goals and objectives that you set for your company (see Chapter 4 for more info).
You take into account the social values that surround your company and drive your staff, you included (see Chapter 3).
You think about how to allocate and deploy your human and financial resources (see Chapters 12 and 16).
You create an advantage in the marketplace that you can sustain, despite intense and determined competition (see Chapters 10 and 14).
Don’t misunderstand us here: Planning is not always rational science, and business success sometimes can be an inspired outcome of “art.” Some people are intuitive by nature and “go by their gut” more than engaging in a lengthy planning process such as we encourage in these pages. The late Steve Jobs of Apple, Inc., was supposedly one of these creatures. Good for him and them. But let’s be honest: People like Steve Jobs don’t come along often, and the probability that you are one of them is negligible at best. In fact, now that we think about it, Mr. Jobs — one of the most remarkable and admirable business leaders of modern history — could have saved himself a decade of time and boatloads of money if he had devoted a bit more effort to understanding the threat of competition for his original Apple I and II machines. So when that Blinding Flash of Brilliance strikes, grab it and thank your lucky stars. But please don’t run with it until you’ve finished our book. You and all your involved associates will be thankful not too far down the road.
What can you do to make sure your business plan includes a strategy? When it comes to strategic thinking, a healthy dose of plain old common sense and logic works wonders as you pull all the pieces of your plan together. Experience in your industry and some smarts are advantages, too. Unfortunately, we can’t give you any of these gifts. But we can offer you some solid advice to keep you on track. Go to Chapter 14 for more on strategy.
Why planning matters
Planning doesn’t guarantee success, but it does go a long way toward bettering your chances. We’ve seen it with our own eyes. And a recent survey of close to 1,000 small businesses backs up the claim. The survey found that companies that have business plans enjoy 50 percent more revenue and profit growth than companies that fail to plan. It’s that simple.
Always question what makes your company successful — it’s more than mere luck.
Observe customers and markets, tracking their wants and needs.
Relentlessly