Why Write A Business Plan: Launching Your Business With The Fundamentals In Mind

A famed book by Stephen Covey highlights one habit that makes individuals and organizations succeed – begin with the end in mind. This is a very good answer to the question “why write a business plan”? It is tempting to put up a business and have a see-what-happens-next approach towards its management, twitching things along the way and be flexible enough to the challenges of running a business. But the truth is, even though that sounds simpler than drafting an exhaustive plan in paper, it can really get complicated – fast. In fact a business without a business plan is, put bluntly, a business that is planning to fail. A business must be intentional, and nothing can facilitate this better than having a written plan of what the business is all about, its direction, its goals, and its ultimate purpose. This will serve as the glue for the stakeholders of the business, a point of agreement on how the business should be run, and the route it would take to realize its profit targets.

It is simply impossible to grow a business if there is no tangible point of reference to where the business should go. Vision, mission, objectives and values of the business are all included in the drafting of the business plan, thereby making it possible for organizations to have objective metrics of performance. It is only then changes and adjustments can be effectively implemented. You simply cannot improve what you cannot measure.

Writing a business plan is important because it allows a business to sell itself better to its customers. The business plan is a 360 profile of your business model, giving you a bird’s eye view of what you can offer to your clients. Marketing would not be as hard because the point of differentiation and the niche market you want to develop overtime can be clearly seen. You can identify your competitive advantages and then capitalize on that exhaustively. It can also bolster your positioning efforts because you understand the strengths of your services or products. You can simply develop strategies that puts you in the best spot to both retain and attract new customers.

Why write a business plan? One of the most profound answers to this question is to be able to get the right people to run the business. It is of course a well established fact that a business is as good as the people that leads it to greatness. Well, you can have the best of the best in the field, but if they do not fit in, they are doomed to fail in establishing your organization as an industry leader. A business plan can help you implement a very good human capitalization effort. This simply means you are able to identify the right person for the job and then help that person identify himself with the job, and then the business.

Many small and medium enterprises downplay the question of why write a business plan. And this is the reason why many fail to reach its growth projections. Do you want your business to run smoothly? First things first. Write a business plan!

Seven Step Business Plan

To be successful in business, you need to conduct research and write your business plan. Attempting to start a business without a (well-composed) business plan through feasibility study is like a stranger going to an unfamiliar terrain without prior direction. Or better still, it is like a ship without a rudder (which controls its direction). It is in the light of this that the publication of this text entitled “Seven Step Business Plan”, written by Ms. Sheila Holm, a respected business-management expert is a welcome addition to business management literature.

Holm says before preparing this text, she had cycled and recycled clients to every bookstore to work through every business-planning book option. She adds that the clients purchased many books but still wanted more help. Holm discloses that to make it easy and affordable for more business owners to receive help, she started conducting a series of seminars to help owners and their management teams develop their business plans within a seven-step format based upon their dreams and goals.

Holm says the outline of the seminars developed rapidly into a seven-step, one-page form for quick and easy review while updating the business plan according to each change and adjustment to the goals.

The author educates that having a business plan adds value to the bottom line of a business. She adds that this text removes the learning-curve requirement, stressing that she knows you can increase the productivity and profitability of your business when you write your own business plan.

Holm says whether you have not yet written a plan, you have paid a consultant to write a plan, or you have proceeded with your business idea before writing a plan, you are absolutely in the majority. She submits that the truth however is that no other owner, director or team leader can articulate your business idea better than you can, stressing that planning is the key to success and profitability.

Structurally, this text is segmented into seven chapters. Chapter one is entitled “structure”. This author educates here that immediately in your own words, you should begin writing a statement about “how it is around here” according to how you are going to proceed with your business. Holm says many owners, even after they open the doors and operate their business, proceed without a clear statement about their business: how it will meet the needs of customers or how their business relates to the industry. The author adds that their dreams and goals are not in writing or in focus yet.

She stresses that clarity is helpful and has a positive impact upon your bottom line. This author adds that if you want more profit, then you need to gain clarity and if you want more clarity, then you need to schedule a little more time to walk and/or work through the planning process with her.

According to Holm, businesses develop in phases, so it is important to begin the planning process by identifying the part of one or more phases, or stages of development, of the business process your business represents. The author discloses that your business may be at a point where you want to add a phase to your existing plans or it may be an idea that you want to sell to someone else. You may want to purchase a developed product in order to market and distribute it, or you may be starting a business that will include all phases of the business process, expatiates Holm.

She says this stop is a major decision point since it will match your expertise and passion with the type of business you should pursue. In her words, “So, take a moment to get comfortable and get a firm picture in your head of yourself as the owner of the concept or product in one or more of the key phases of the business.” Holm also discusses idea; development; location; production; marketing and sales; distribution; and repairs or redevelopment in this chapter.

Chapter two is based on the subject matter of placement. Here, the author says the biggest mistake owners make is to think they have the most unusual business idea. Holm stresses that she is always concerned when a client says she should hurry up and develop a business plan before someone else steals the idea.

She reveals that ideas are out there and we do not have the market cornered on any idea. The author adds that only very few people with ideas will proceed and develop the ideas into a tangible entity, a business that will become part of the marketplace. She stresses that you are the exception to the rule.

The expert submits that now that you have set out to pursue your idea, it is important that you continue to follow and recognise the needs of the market that initially inspired you. She explains that if you understand the placement of your business within the industry, it is as important today as it will be that every day you are in business.

In Holm’s words, “Too many businesses forget to stay current regarding the trends within the industry and the business, market in general. The business process is a fluid process, so do not plan on making a decision regarding placement and then setting your business idea into a concrete base and forcing it to hold up to this statement for more than a few weeks. This is why I absolutely recommend reviewing the Seven Step Business Plan form each month.”

She illuminates that this phase of planning your business is a good time to meet and interview experts. On the aspect of customers, Holm says if you think everyone is your customer, take a second look at the facts about your business and what it will provide to the community. The author educates that defining your customers will assist you in the process of matching your business with the top competitors in your industry She adds that you have to know your competitors and how they are doing business within your industry.

“Begin with the title ‘Competitors’ on a page of your notepad. Add names to your list each time you identify a business in your industry. Expand your list and add all related businesses, increasing the scope and parameter of your search. This list will also help you gain an objective view of how the various businesses affect your business and your industry,” educates this expert.

Chapter three is on the concept of leadership. Holm says the most important statement you can make about your business is the statement you make about yourself and your involvement within each phase of the business. She adds that the statement you make about each member of your leadership team closely follows the importance of the statement you make about yourself.

According to this author, your leadership ability is critical as it is your ability to inspire others. Holm emphasises that leadership skills and abilities develop into the team strengths that are going to be evident in the business structure and help sell the business to each customer, vendor, employee, and business. “Remember, you are not able to be all things to people within the team. Each leader plays a specific role, and the team’s strengths and support in areas of weakness will define the overall strengths of the business,” guides the author.

The business management expert educates that when you detail your involvement, you should ensure that you align your statements with the phrases you have written to describe your business today and your plans for the future of this phase of the process. She adds that this statement will need to remain flexible in order to complement the plans for each aspect of the business as you continue to refine them.

In chapters four to seven, Holm analytically X-rays concepts such as purpose and highlights; vision and mission statements; operational and marketing plans; and financial and profit plans.

As regards stylistic assessment, the report card of this text is in blue. For instance, a lot of textual and graphical illustrations are used to reinforce the understanding of readers. The book is also very educative in that the chapters are further broken down into many sub-segments to achieve simplicity and easy comprehension on readers’ part. Holm includes one-page fill-in-the-blanks form representing a prototype for a typical business plan to guide readers. What’s more, the language is simple.

However, a technical error is noticed in the text. This is the omission of a hyphen in-between the first two words of the title of the text “Seven Step Business Plan”. Omission of the natural hyphen has grammatically deprived “Seven” and “Step” from becoming a nominal compound modifier to the phrase “Business Plan”. It is structurally supposed to be “Seven-Step Business Plan”. Without a hyphen, one will also be grammatically compelled to add an “S” to “Step” because of the cardinal word “Seven”.

On the whole, the text is a necessary companion for (prospective) entrepreneurs, business managers, etc. What else would you expect me to say if not that “it is highly recommended”? Get a copy of this book today and learn how to write a business plan so that you can achieve business can succeed.

How to Create a Business Plan For a Service Business

Creating a professional business plan for your service business is just as important as the business itself. It is a sales tool as well as a possible means for getting financing. If you are a novice, there are many free templates on the internet. Search for “free business plan service business. Microsoft also has free templates on their website.

When you finish writing, carefully read and spell check your plan, look for and add keywords to make your plan easy to read and remember. Include all of the sections below then add some of your own.

Get help from Better Business Bureau
Get to know your local Better Business Bureau. Apply for Accreditation. Being accredited with the BBB shows you meet specific standards of truth and honesty, and automatically instills a trust for your customers. Be sure to include the BBB logo in all of your advertisements.

Small Business Association
The Small Business Administration has many free resources including “Free Online Courses”.

Mission Statement
The mission statement should be a very specific description of the reason you are doing this business. The mission statement should be a very specific description of the reason you are doing this business. For example:

“Our services are designed to help the elderly, disabled or anyone who needs a little assistance to stay in their home, be more independent of family and friends.”

Services Offered
List and describe the types of services and the cost of services you will provide. Include current and new services that will be offered in the future and the projected dates. This section should start with a summary of services followed by a very detailed list including: description, your cost to perform service, fees, and profit.

The People
This is a list and a short description of the each person who will be part of the business. Include a list of accomplishments if any of each person. Also include an organizational chart and detailed job descriptions.

Competition
Know who your competition is! Detail the advantages your business will have over theirs. What services do they offer? How much do they charge? This should be a detailed list of all the competition.

Market Research & Plan
Is there a market for your service? What will your costs be to get started? How has the industry changed in the last ten years? What are the new ideas and trends? What type of marketing will you do now, in one year?

Goals & Objectives
List short term and longer term goals. Where should the service business be in one year, in five years? Make a list of objectives and how they will be measured. These should include: finances, customer base, equipment and so on.

Financial Plan
Estimate the cost of doing business and how much income will be needed for the first, second and third years. This should be a detailed estimate that includes all income and expenses. You should have at least one year’s worth of cash in the bank before you get started if you plan to hire several employees. They expect to be paid no matter how much money the business makes or does not make.

Resource
List the required equipment both computerized and other equipment needed to provide the services. Include any equipment that you may need to rent or purchase. Also include personnel and financial needs.

Risks
Be sure to check into business insurance for you and any employees. Property, liability, workers compensation, and auto insurance are good places to start. Do a Google search on “Business Insurance” or check with the company who insures your home or car to get some referrals.

Key Issues
Are there any short or long term problems that will need to be resolved? Issues may be funding, business location, marketing or changes in the industry.