Writing a business should be the first step before you start your business. Reducing your ideas to writing will greatly assist you along the way as you develop and mature your thoughts and decision making. It is often in the process of writing the plan itself that your vision is strengthened and galvanized into you mission statement and direction. Though a business plan, in order to be effective, needs to be a working and actionable document updateable at least on an annual basis and more often if situations warrant. A good business plan will contain the below components which are essential to the overall plan’s depth and ultimate success:
 

Cash Forecasts. Perhaps the biggest failing of entrepreneurs and business owners alike is their failure to carefully contemplate and plan for amount of cash that will be needed to adequately fund the business’s growth and day-to-day operations. It has been often said, “tongue in cheek,”  that one should carefully evaluate and plan for the cash flow that will be needed to run a business and then they should double it Often owners will spend cash without thinking ahead or re-forecasting for the next months and years only to find, if they had a “do-over” that they would have been more prudent with their spending. Developing a systematic and cautious methodology for spending that includes checks and balances, layers of approval, ample cushions and available credit are good defenses to ensure sound cash management practices. Great caution should be exercised to ensure that credit is only used when needed and not when convenient, when there is adequate investment in the expenditure/project by the company, and when there is a sound, reliable and predictable basis for repayment.
 

Budgets.

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Helping to lift the veil of business is a key concern and goal for all those concerned in pursuing the furtherance of your business venture. Keeping these basic tenants in mind will do much to ensure your business success, and in so doing will enable the spiritual goals of it as well. These considerations will help you along the way and to ensure that your plans are both achievable and achieved.
 

Financial Model/Business Plan

Perhaps the most important first step is the development of a Financial Model/Business Plan. Such a plan should take the form of a written document and should be detailed enough so that someone independent of your operations would be able to review and to quickly discover your business resources, talents, goals, and plans to get there. A good business plan would contain all of the following:

• Description. Knowing and documenting who you are and what your short and long term vision are the essential components of this section.
• Marketing. Knowing how you plan to grow your business, church or ministry is integral to having a workable and viable plan.
• Financial Management. Knowing your financial strengths and weakness and your cash flow needs and need for capital are a critical part of the process.
• Management. Knowing not only the needs of key management players and the “trigger dates” for bringing on additional staff and administration are integral components of the success quotient.

Writing a business plan is your first step to maintain order and to develop a well-thought out and seasoned plan. It is during this process that many “missteps” can be avoided with wise and judicious planning.
 

Plan, Plan, Plan

Business Planning and its continual updating are essential.

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Most entrepreneurs avoid writing a business plan until they’re confronted with  the ultimate obstacle:  a need for outside funding.  The first question out of a  lender’s mouth, whether an angel, venture capitalist or banker* is inevitably, “Can I see your business plan?”  If you don’t have one, the conversation ends there. 

So if you’re unsure about needing a business plan, or if you’re sure you don’t need one, you should ask yourself the following questions—just one “yes” means you need a business plan. 

If you’re a start-up:

• Do you need outside funding (i.e., money from someone else)?
• Should you think about the big picture—where you want to go and how you’re going to get there?
• Do you want to avoid as many mistakes as possible?

If you’re an existing business:

• Do you need outside funding?
• Do you feel like your business is running you rather than you running your business?
• Do you want be more proactive and less reactive?

A business plan is an invaluable investment of your time and effort, regardless of whether you need outside financing.  I liken it to eating your vegetables—you may not like it, but it’s really good for you.  Why?  Because a successful business needs a solid foundation from which to grow.

What follows are the three most frequent excuses entrepreneurs use to rationalize why they’re not writing a business plan.  Since a business plan can mean the difference between success and failure, be sure not to fall into this trap.

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The number of resources available to help write a business plan is virtually infinite.  With the aim of narrowing down the list to a helpful few, here are a few of my favorites:

Business Plan Website

The Small Business Administration (SBA) at www.sba.gov.  The specific link for business plans is:

www.sba.gov/smallbusinessplanner/plan/writeabusinessplan/index.html.

Business Plan Book

My favorite book is The Business Planning Guide by David H. Bangs, Jr.  It explains each part of a business plan in clear, concise language without too much jargon.  Examples can be found throughout.

In-Person Assistance

These wonderful organizations offer literature, seminars, workshops and consulting services at little or no cost:

• SCORE (Service Corps of Retired Executives):  www.score.org

• SBDCs (Small Business Development Centers):  www.sba.gov/sbdc

Legal Issues

Nolo Press (www.nolo.com) is the resource for legal information for consumers and small businesses.  Their legal self-help publications address a wide variety of topics, and can be purchased online or found in local bookstores and libraries.  More importantly, their information is trustworthy and easy to understand.  Topics include patents, trademarks as well as how to decide on the best legal entity for your company (LLC, incorporate, etc.).

Creative Financing

In their own words, “Prosper (www.prosper.com) enables borrowers to request loans of up to $25,000 by posting listings indicating the amount they want to borrow and the maximum interest rate they wish to pay.  In other words, people who need money request it, and other people bid for the privilege of lending it to them.”

Venture Capital Due Diligence

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Attracting an investor is like attracting a mate—you want to pique the investor’s interest without showing all your cards at the outset.  The perfect vehicle for achieving this delicate balance is the Executive Summary.

The goal of an Executive Summary is to whet the appetite of the investor by presenting a compelling premise, an irresistible hook.  Your short (5 pages or less) document is meant to give a potential investor every reason to say “yes” and little reason to say “no” to a face-to-face meeting.

While it’s typically included as part of the business plan, the Executive Summary should ideally function as a stand-alone document.  Its function is to build enough interest to get you meetings with potential investors.  Once you’re at the meeting, then you can dazzle them with your presentation and ready answers.  Ideally your Executive Summary should include the following 10 ingredients:

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Okay, you’re finally writing your business plan.  But will it help you secure the funding you need?  Will it be your road map to success—helping you to build a successful business?

Most entrepreneurs write their business plans with one goal in mind:  to raise money.  Even so, a business plan is a double-edged sword.  While it allows you to introduce and sell your business to the reader, it also gives the reader the opportunity to say “No, thanks.”

Don’t blow your big chance.   Now more than ever, you only get one chance to make a good first impression.  Below are 7 mistakes to avoid—7 sure-fire ways to shoot yourself in the foot.

Note:  If you are writing your business plan for the purpose of developing an operating blueprint, it is just as important that you avoid these 7  mistakes.

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The world’s oldest form of business partnership is alive and well. In fact it is thriving and growing. It is the business partnership of two people who live together; they are called copreneurs.

Copreneurs make a powerful business team. Their special relationship brings a unique synergy to their company. They also face unique pitfalls. It is not an easy task to critique the work of the one you love. The business relationship can easily consume the personal relationship. And then there is the question of how to divvy up the workload.

A well developed and documented Strategic Action Plan that is used on a daily basis goes a long way to alleviating many challenges facing copreneurs. It provides them with something to point to other than each other!

A Strategic Action Plan is a working document that provides the road map to manage and control the growth of the company. It defines the long term measurable objectives for the company and links them to specific actions to be taken in the next year. It is the glue that keeps the partnership together.

It is always assumed that because copreneurs share a very close relationship they also share the same vision for the company. This is not necessarily true and so the first step in the development of the Strategic Action Plan is to clearly define the company’s Mission Statement. There are two kinds of mission statements. The first is a mission statement full of meaningless platitudes; this is easy to develop and quite useless. A real mission statement tells the reader what the company does, who it serves and what sets it apart from the competition. This type of mission statement is very difficult to write but is an essential foundation for the Strategic Action Plan.

The next step in the planning process ensures that the copreneurs have a common vision of where they want their company to go in the future.

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Whether you have a new business or one that has stood the test of time, you should create (or dust off) your marketing plan. Developing one doesn’t have to be a daunting task. Investing a little time will yield great dividends. Here are a few things to keep in mind.

Your plan should be a working document, a road map for your business. It should be designed to help you understand and grow your business. I recommend housing it in a three ring binder so you can change and add to it when necessary, include blank note pages, store relevant articles and expand on it throughout the course of the year.

Your marketing plan should include the following:

• List of products and services
• Detailed description of your target markets
• Challenges and competitive analysis
• Budget
• Identification of appropriate marketing vehicles
• Calendar with deadlines and expectations
• Goals; specific and quantifiable that can be monitored throughout the year

PRODUCTS & SERVICES
Your list should include all the services you offer including any you provide free of charge. Note which products or services are new, which will be offered in the coming year, which will be phased out, and those that are unique in the market. You might also want to write a list of products and services that you would like to offer this year or next year to begin the planning process.

TARGET MARKET
Next identify your target market. First, where are they located? Local, regional or national? Then define each target market as specifically as possible. Very often I have clients who say, “Everyone can use my product.” This is rarely true.

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