We now come to probably the most feared, most avoided but the most important task in beginning a business. Many believe that a business plan is only for those seeking outside financial help like from a bank or investors. Others believe that this is just unnecessary paperwork and that the best business plan is in their heads. Some who believe in it do so only half-heartedly and come up with a one or two page plan of how they see their business progressing. All these approaches are misguided and without proper direction, the business is more likely to sink than grow.

The most important point to remember about a business plan is that it is first and foremost for you! It is to layout a concrete plan to successfully start, manage and then grow your company. It will force you to think and invest in strategy planning, market research, financial planning, operational details and marketing plans.

However, we will concede that it is not easy to immediately start out working on a business plan and every business plan will need working and reworking. We will try to provide you first with some general guidelines on what a good business plan should include and once we have you thinking in that direction, we will start helping you fill out all the details in the business plan.

Let us first outline what a well written business plan will contain:

- An attractive statement of purpose – when people ask you what your business does, this is the first statement you will be using.

- Complete description of who you believe your customers will be, any special niche you are aiming for as well as a general strategy for winning over that niche.

- Complete description of your product or service. Mention what are the highlights and what could be its challenges, production or selling wise.

- A well compiled list of people who will be working with your or advising you in various aspects. Mention clearly what their skills and areas of expertise are.

- Details of financial plans that will show how you plan to finance the first few years and expected revenues and expenses

- Major risks that you may face before your business settles down and major advantages that may help it grow well.

As you can see, your business plan is more like a map to guide you through, at any point in time. If you have given sufficient thought to planning and written down the steps in sufficient detail in your business plan, no matter how many ups or downs there are, you should be able to stay on course. In fact, one expert likes to compare a business plan to the centerboard of a sailboat. Irrespective of how the wind is blowing, your business plan will always help you stay on course, headed in the right direction.

If you would like to look at some samples before you begin on one, you can speak to banks or business websites, which can help you by showing samples of a few business plans. You could also look up one of the thousands of books in your local library, which should contain a sample. However, treat the sample as just that. It is meant to give you an idea of what are the essentials that should go in a business plan. Do not worry if your plan is too long or short, simple or complicated. What should matter to you is that it is written in a manner that you can follow easily, contains information that is helpful to your business, identified possible challenges that could arise and outlined plans for overcoming them.

Business plan development is considered a necessary evil by many entrepreneurs – it is the process of creating a document which will help them pitch to investors and lenders. However, funding aside, you will improve your chances of business success if you take business plan development seriously.

Planning Does Help

It is a simple “out” for entrepreneurs to throw their hands up, saying “If so much of business is about flying by the seat of my pants, reacting to opportunities and threats and they arise, and changing plans continuously, there is no reason to plan for my own purposes. Certainly, a plan will be required by funders, but that plan does not have to have any similarity to the tactics which are used in the end.”

However, planning does help, even if the plan needs adjustment down the road. A plan can zero in on alternative strategies which might work and throw out those which do not fit the company’s intended brand, customer markets, or competitive situation. Without a written plan, the company is in danger of trying out strategies which seem to make sense on the surface, but really lack a good fit with the company in the long-run.

Keeping the Team Consistent

Another major reason to plan is to keep all team members on the same track. Without a written guide setting out the mission and strategy to achieve that mission, different managers may develop their own ideas about the priorities of the company and end up working at cross purposes. To serve this purpose, the business plan must be shared between the managers at least. The managers must all work to pass on guidance to their staff based on the plan.

Setting a Reflective Tone

It is extremely easy for entrepreneurs and small business owners to be caught up in the action of running their businesses on a day-to-day basis and consider reflection on where the company has come from and is going to be a luxury. Being serious about business plan development from the outset sets reflection as a priority for the company, and a business launched on this foundation stands a better chance of continuing to use planning as a tool going forward. When taken in balance with action and awareness of the present situation, reflection and planning can serve the business well.”

If only 10% of businesses succeed – you want to make sure you’re one of them. This business plan layout will help you do that.

Most businesses fail because they run out of cash. Even highly profitable businesses can run into cashflow problems if they try to expand too fast for their level funding.

Your business plan strategy has to match your level of ambition to the level of funding you can reasonably expect to invest. If you can’t acquire sufficient investment, you have to reduce your ambition.

So, one of the most important outcomes of the business planning process is to decide on your ambition and work out the level of investment required and how you intend to fund it.

If you’re requesting a loan, the lender will expect your business plan to clearly show how you intend to spend the loan capital and that the business can generate sufficient cash to service the debt in terms of both interest and capital repayments.

If you’re aiming to attract equity finance, the investor will expect your business plan to indicate the expected return-on-investment as well as the likely exit strategy and timescale. This will then be compared to other opportunities they may have under consideration.

For it be fit for purpose, you have to write a business plan according to who will read it. Lenders and investors are busy people, so you need to provide the answers they require within the first 1 or 2 pages of the plan. They can then decide whether they’re interested enough to read further. So, the business plan outline should begin as follows:

1. Executive Summary

Now, whatever your level of ambition, the market has to be large enough to satisfy it, especially when you take into account the extent of the competition you’ll encounter. So, the business plan has to show an analysis of the market opportunity and how you intend to exploit it with your products and services. It also needs to show how you plan to market your brand and attract customers. This leads us to define the next 3 sections of your business plan:

2. Market Analysis
3. Products and Services
4. Marketing Plan

OK, you’ve explained your market, what you intend to supply to that market and how you intend to market your products or services.
Now you need to explain the infrastructure you’ll need in order to deliver the products or services and how you arrived at your present position. If a potential lender or investor doesn’t think your business is equipped with the right capability and experience, they won’t be inclined to invest. This leads us to define the next 2 sections of your business plan:

5. Company Background
6. Company Structure

The section on Company Structure should include any resources, equipment or systems you have or will require in order to deliver your products or service. It is quite likely that you’ll be using some of the funding to create the Company Infrastructure.
There is one more essential section that any lender or investor will expect and that relates to risk. You need to show that you’ve considered areas of risk and how you might mitigate for them. I tend to refer to this section as:

7. Business Analysis

In this section you should include your S.W.O.T. Analysis (An assessment of Internal Strengths and Weaknesses and External Opportunities and Threats) and a Sensitivity Analysis (An assessment of how far certain parameters can move for the business to remain viable).
If they’re interested in evaluating the opportunity, they’ll need to take a closer look at the numbers.
So, they’ll expect to be able to view your projections for Profit and Loss, Cashflow, Balance Sheet and a Sources and Use of Funds Statement. This we’ll refer to as:

8. Business Financials

Finally, if you’ve referenced any material or wish to include any supporting information it’s better to avoid cluttering the main body of your document and add it all in a section at the end:

9. References and Appendices

And that’s it. For a lot more detail about why this 9-section structure works and exactly what to include in each section, you can read my book:

The Heart of Business Success – How to overcome the Catch-22s of growing your business

To obtain your copy, please visit: http://www.theheartofbusinesssuccess.com
Good luck!

Here they come….the emails you’ve been waiting for. You open them. You see a pattern. These commercial property listings are all the same. You choke it up to the fact that you contacted the commercial real estate brokers at the same time and they’re sending you what’s available on the market. A few weeks go by, and the investment property sales lists dwindle and no agents are calling. What happened?

You’re every commercial broker’s business and no broker’s responsibility.

Rewind a few weeks. You’re a commercial real estate broker. You receive a phone call from an investor who’s looking for a good deal in your market. He wants you to send him a good investment property to buy, so keep your eyes open and start hunting. You want a commission right?

Well, sure. But here’s the catch. You get at least one phone call like that every day. You’re asked to find a good deal for this investor, maybe go hunting for him, and start sending him listings. He’s probably not a hot horse who’s going to buy a property off the first list you send him and he’s likely having the same conversation with other investment property brokers in your market.

He’s everyone’s business and no one’s responsibility.

You add him to your database. Maybe you put him in your email distribution list and figure that something might happen, but if not, you may get a call one day when he has a property he needs to lease or sell is commercial property.

After a few weeks, you stop sending him lists of investment properties for sale because you’ve also been asked by 15-20 other investors in the same period of time to do the same activity. Somehow, they think you’re out there working for them, too, because they’re getting the same listings as everyone else. What they don’t know is that no commercial broker’s out there hunting, they’re just entering a search and clicking the send button.

You’ve been selling investment properties long enough to know that most of these calls are a fool’s errand. The promise of a commission looms on the horizon, but you know you’re going to have to spend more in time and resources to maybe get that commission than you’ll likely earn, plus you have no commitment from any one investor that they’ll honor your commission if you bring them a commercial real estate investment opportunity. Pretty risky if you’re a broker. You decide you’re better served investing in those who have hired you to help them acquire and dispose of investment property.

Ultimately, as an investor, ask yourself, when you repeat the same behaviors as everyone else by calling a bunch of brokers to tell them what you want, should you expect an outcome that’s different than everyone else who’s doing the same?

The next time you’re on the phone with a commercial broker, try asking him how many calls he’s had from investors “looking for a good deal” in the last 30 days. Then ask him how many of those investors he’s spoken to after the initial conversation. Chances are you already know the answer.

To get different results than everyone else, change your approach. Ask your investment property brokers how many investors they’re representing. The ones who have clients are getting deals done, while the ones who aren’t….well, just check your email box for the latest commercial property listings.

By taking a different approach and employing an investment property broker to execute a search and acquisition on your behalf, you may be delighted that when you become someone’s responsibility, you’re everyone’s envy.

Most future business owners create at least a simple business plan as an operating guide or to help facilitate a small business loan. If you are going to invest the time to create a plan, there are many other ways this work could and should be leveraged.

It’s true that you wouldn’t want your plan showing up on the internet for the whole world to see. But does it have to be labeled top secret and kept under lock and key? This article explores some ways successful entrepreneurs leverage their business plans to help launch their new ventures.

For any of the ideas below, always give careful consideration to who your audience will be. Next, make some decisions about which sections of your plan should be revealed. Finally, think about the level of detail you would be willing to share with your audience.

The risks of handing out copies of your business plan to a broad audience are high and easily understood. (Don’t do that.) However, properly managed, sharing your plans and ideas at an early stage can be tremendously beneficial. You will suddenly find that you start to meet new prospective partners, investors, advisors and potential key employees. Let’s not leave out customers. Any time you’re talking about your business, you’re marketing it to future customers.

Here are four ideas that are available to just about anyone at little or no cost. Review the list of ideas below and see which ones are right for you.

Business Plan Competitions. Many organizations host competitions for future business owners and their business plans. The guidelines vary on which aspects of your plan must be submitted. A few minutes spent on Google will help you find local and national business plan competitions. Many even offer significant cash prizes to the winners. Rather than simply submit your plan, use the opportunity to get to know the organization hosting the competition, the judging panel and anyone associated with the event.

Venture Forums and Angel Investor Group. Most medium and large cities have one or more venture groups and angel investor groups that have monthly meetings. Their attendees go beyond investors themselves. They include people with a variety of reasons for wanting to meet future business owners. The presentations at these meetings are usually made by would-be entrepreneurs presenting some aspect of their business plan. The formats vary, but typically some feedback is provided to the presenters.

Mentoring Organizations. There are many types of mentoring organizations. When you’ve just put together your business plan and are looking to take it for a test drive, look for those whose mission is to help nurture new businesses. Your local chamber of commerce, SBA office or even your banker can probably help you identify mentoring organizations in your local area that can provide insight and feedback.

Universities. Contact the business department of a local university and find out the name of the dean of the business department, or a department closely aligned with your type of business. Contact them by phone or email. Let them know that you’ve developed a business plan and you’re looking for qualified experts who might review it. Many MBA programs look for individuals to present their plans to their classes. Still others assign a group of MBA students to work directly with the business owner over a period of several weeks. There is usually no cost for this type of assistance.

Making it Happen. These are just four ways you can leverage the work you’ve invested to write your plan. Once you start thinking about the value of promoting yourself and your plan, other opportunities will show up on your radar as well. Even if you are still at the stage and do not have your plan ready to take outside, take a look at how and when these ideas will be right for you.

By carefully and selectively looking for opportunities to present your ideas to others, you’ll meet new people, forge new relationships and fine-tune your ideas in ways that will help you succeed.