Having a good small business plan will ensure that your journey to success is much smoother. All successful business owners know that having an organized, well thought plan is essential to see the results they expect. Even if the business plan doesn’t give the results that you would have thought in the beginning, you can tweak and change different areas of your process to perfect it.

I thought I would go through a step by step guide to what you need for an effective small business plan. Many people try and start a business without any true expectations for the future other then ‘oh this is going to work’. You have to know exactly what “should” happen so that the surprises are less. In most cases surprises in business aren’t positive.

You must have a plan for many different areas of starting a small business. How are you going to fund the start up fees? How do you expect to sell your product/service? How do you expect to pay your employees? How are you going to promote your company effectively? Most importantly and what most business owners don’t think about is where do you want your business to be in 5…10…20 years?

Creating the right small business plan is all about creating effective systems. A system is something that you can use over and over again in different situations to receive expected results. You at least have some idea of what’s going to happen if you have the right systems in place.

The first step to your business plan is knowing exactly how much money it’s going to take to start your company. None of this has to be a professionally written up small business plan that costs thousands and thousands of dollars hiring an “expert”. Take out a piece of paper and write down your plan. The main thing is that you know exactly how you are going to fulfill your dream of being a successful small business owner.

So what are your opening expenses? Here are some questions you need to answer to find out your estimated dollar amount:

How much money does your product or service cost you? How much money will you charge for your service/product? How much money do you require to live for two years with no profit coming in from your business (safety precaution)? How much will it cost for your employees for 2 years? What are your legal fees? What are your CPA fees? How much will getting a physical location cost you (if needed)?

Every business is going to be different so think about anything that you need to spend money on to get it running. The next step you must consider is how are you going to get this start up money. Are you going to go to a bank for a loan? Are you considering finding a partner that can cover the costs with the agreement you can buy out the company later down the road? Do you want to talk with a wealthy family member about your business? Anyway you choose to get the money doesn’t matter.

Having a thorough small business plan is going to help you get that start up money though. As long as you can show the lenders how you plan on getting a return on their investment, you will be set. It doesn’t matter if you have horrible credit or don’t know anybody that will lend you large amounts of money. You can always find a way. Think outside the box!

Alright the next step should be the simplest for you. You want to write down your complete sales funnel for how you plan to sell your product or service. Go through every step you expect a customer to go through to reach your bank account. What are you selling exactly? How are you packaging the items? Are you providing multiple services and products? What do you expect to be your number one seller? What’s your specialty?

Once you have all these areas done, you have to know how you are going to promote your business and keep the business coming in. This seems to be the biggest problem most business owners have. You know everything there is to know about your products/services, but you know nothing about marketing. That’s expected too. Marketing is an expertise in itself.

If you’ve read much of my blog, you know how I preach about smart marketing. Smart marketing is all about spending your hard earned dollar and getting more then you spent in return. In other words, big return on investment (ROI). Every market will be different and different marketing tactics will work in each of them. You have a huge list of options too.

Newspapers, Yellow Pages, Radio, Television Ads Fliers, postcards, promotion coupons Referral programs Internet marketing Email marketing Holding seminars and special events Business to business referral programs

These are just to name a few of the options you have. You can never go wrong working with other local businesses. It’s beneficial for both businesses and can be something that explodes your business quickly. It should definitely be part of every small business plan.

No matter which direction you take your marketing in, remember to always be able to track your marketing method. You always want to know how effective each method is for your business. Don’t spray and pray! In other words, don’t just buy what that marketing salesman is selling you if they can’t show you how many customers you are getting in return.

Creating your small business plan with all of these areas covered is a great start to having a successful business. You can go in deeper and deeper to have an even more effective plan and you should, but this is a great start for anyone. Once you have the plan, you just have to follow it step by step. It makes your job so much easier. You have too much to worry about already. There is no reason to have to constantly be wondering…’what am I going to do now?’ You need to know what you’re doing beforehand.

Planning is an integral part of any business and the same goes with a Christmas light installing business as well. If you want your business to run efficiently, you will need to chalk out every detail and plan meticulously much beforehand. The three things you must plan are the marketing strategy, the number of people you need to hire and the amount of material you will need.

You will also require a small amount of capital to start your business with. Always ensure you purchase materials and equipment beforehand because light distributors and importers generally raise the prices of products as the winter season becomes closer.

The quicker you plan your marketing strategy, the bigger the advantage you will have over your competitors and the greater the money you will earn. Once the marketing strategy planning is done, you can chalk out a schedule for light installation.

About two weeks before Christmas, all your planning should have been done. By then, all your preliminary work should have been completed such as the hiring of workers, purchasing of materials and equipment and scheduled your customers. Christmas lights can be installed once the month of November ends.

Once the summer is done, you do not want to be stuck in a predicament where you have not planned anything. You want to earn a lot of money and run your business smoothly and hence planning early is of paramount importance. In conclusion, planning must be done by November and installation can begin by the end of November.

What does it take to convey your idea to financiers?

- How will you organize all that information? What you need is a clear outline and focus.

- First you must identify your audience. Who are your potential stakeholders.

- Rank them according to importance, but most importantly have a plan on how they affect your future business.

In terms of an effective and well accepted layout, the following is a good start.

Business Plan Layout

Executive Summary – Who are you and what are you planning to do?
List of managers, key people involved, roles and experience.

Company – Where is your company located and what’s your specialty?
Area located, physical, distribution etc.

Product or Service – what is your service and why is it better.
You need to provide greater value than currently in the market.

Market – Who are you distinctly selling your product to and why will they buy it?
Is it because of price, service, new technology?

Competition – Who is your competition in terms of product, pricing and placement strategy in and outside of your local area?
How do you differentiate from competition in order to maintain long-term staying power and drive customer choice.

Sales and Marketing – How, where, when and to who are you going to sell your product or service and what makes it special?

Operations – Who will be operating your company, managing and what systems will be in place?

Financial – How much money do you need to operate your company in the next 6 months to 5 years?, How will you spend it specifically?
Break it down into short and long term finances, fixed and non-fixed assets. Can you lease products?

Appendix -pertinent information, contracts, references, etc.

Business Growth Coaching Solutions @2005

Before the business plan is even started, a little prep should be done first:

Pre-Business Plan

Business and Personal Feasibility. Without conducting Personal Feasibility, you miss out on positioning your business relative to your skills and interests. Without Business Feasibility, you won’t have a basic idea of your revenue model. I don’t include this as a numbered step, but it is the unspoken requisite for your business plan.

Business Plan

1. Mission. Often perceived as an expendable piece of your business plan, your mission is as important as anything else. Without a defined mission, you don’t have a good grasp of your personal goal of starting one.

2. Target Market. Who will the average customer be?

3. Competition. After identifying who your Target Market is, you’ll be able to identify who else is competing for them. Who are your competitors and what are they good (and bad) at doing?

4. Service Niche. Your service description will detail on the scope and specialization of your offerings. What packages do you offer? While it’s tempting to just start your business with an unclear scope of services and Target Market, the “build it and they will come” strategy rarely works. You’ll flounder and start moving away from a specialized service for a certain kind of person in an attempt to get volume. Your Unique Selling Proposition (USP) will build upon the findings in your Competition. What one desired thing isn’t being delivered to your target market by the existing competition? Build your Service Niche around the USP. This will focus your identity on a key thing that customers can identify with you.

5. Marketing Vehicles. You need to pick the right mix of vehicles to get your name out there. You should look at both online and offline vehicles.

6. Exit Plan, Vision, and Milestones. This is your macro-to-micro goal setting. I don’t see how you can move forward without a plan of what needs to be done. Exit Plan is how you want your business to end five, ten, thirty years down the road. Vision is where it will be in five years when you’re still on top. How will it have grown? Milestones are the steps required to launch your business or make a few initial sales.

7. Financial Projections. The most dreaded section of the plan shouldn’t be reserved until the last section. You should be working through your financials throughout the plan. This will show how, when, and where you will make money.

This has worked the best for my clients as it’s more than a back-of-the-envelope plan while it’s not approaching the complexity of an institutional business plan. Feasibility and Mission are the forgotten step children of the business plan process and should not be seen as trivial. The above can be written between five and ten pages and shouldn’t take more than a few days.

Yes, you are ready for the new year. Your big new years resolution was owning your own business. You started looking at all the possibilities to make money and be your own boss. Unfortunately you do not have a startup business plan to guide you. You think you can just jump on the next big money making product you see on tv and it will be as simple as they say. I hate to tell you this but it just doesn’t work that way.

Too many people try to start a business with absolutely no clue how to get started. Having a startup business plan will help you focus your business ideas and give you a point of reference to start from. It doesn’t have to be so formal. Just put down your plan of action on paper step by step and see where it takes you. It will start out small at first but once you see it you will then realize that you have left some things out. Once your plan begins to grow you will see that owning your own business is a little more complicated than you first thought.

You just can not assume that just because your business will be small that there is no need for a startup business plan. Big or small you having a plan will help you with your time management and budget concerns. See first hand how to advertise your business, what your competition is doing, what tools you are going to need and more. Getting a successful business off the ground can take months before you turn a profit so you better have some sort of plan in place.

Just because it is on paper that does not mean it is etched in stone and you can never change it. Owning your own business means you are going to have to make changes all the time. No one gets it write the very first time. You may have to adjust your plan every week or two until you see success. You are the boss so your employers or customers are going to expect you to have a plan for what ever comes up.

So remember to first put together a plan of how your business is going to work. Never try to do it on the fly. If you are unorganized then it will reflect on your business. And if your business is unorganized just imagine how your potential customer will feel when they try to do business with you.