Getting ready for the planning process
In this computer age, a number of business plan formats are available on CD or DVD or downloadable from the Internet, and they provide guidance and are useful tools in the preparation of the plan. Frequently, as the planning process progresses, you will want to make changes, and having computer-based software certainly helps in that process (see Page 12 – Resources).
Points to remember as you proceed with your planning process:
- Planning often makes the difference between success and failure.
- The approach to investors and bankers requires a plan that is neat, concise, and to the point; no more than 12 - 15 pages, including financials, for a small business.
- There is no standardized format. You can tailor your plan for different audiences, and show why it will be a good investment, both in time (for prospective employees) and money (for financial backers). Even if capital isn’t required, it is a very good idea to prepare your plan as if it were, for it is a living document that should guide you as the business progresses. You want to reference it periodically to make sure you are measuring up to your own expectations.
- While a good plan can assist in your success, a lack of implementation skills will most likely lead to failure.
- SCORE and SBDC counselors are always available to help you with your planning process.
Select a name for your business that fits. It can contain your name, can include a description of the product or service to be rendered, or it can start with the letter A (AAA Plumbing) so it will show up first in directories. Next check an Internet registrar (see Chapter 16, Resources, Internet) to find out if it is available for your planned website.
(Put the name in here)
Become familiar with the seven “M’s” that must be successfully implemented if a small
business is to be successful.
- MOTIVATION to start the business based upon an idea that your product or service provides a better way of filling a need in the market place than currently exists.
- MANAGEMENT experience in the form of implementation skills to turn an idea into a profitable reality.
- MONEY in the form of debt or equity required to sustain the business until it reaches the break-even point.
- MARKET understanding, including demographics, size in revenue dollars, and expected market share over time.
- MANUFACTURING or sourcing of your products, including backup sources if required, and assurance that availability, consistency, and costs of your procurements can be monitored and controlled.
- MARGINS must be such that your fixed costs can be covered and provide an acceptable level of profitability for the investors.
- MEASUREMENT systems must be in place. If you don’t have the means to measure, then you don’t have the means to manage.
To insure that each of these components have been addressed somewhere in your plan to the satisfaction of the owners and investors, and that risk has been minimized to the greatest extent possible, list the plan’s pages here that refer to each of the 7 musts.
This is part 1 of a 2 part series and was extracted from East Bay SCORE’s "How to Start and Manage Your Small Business." The full reference manual can be downloaded by clicking here.
*This blog is intended to provide information to support startups and existing small businesses. A sincere effort is made to ensure accuracy, but no warranty, express or implied, is provided in that regard and East Bay SCORE and the author will not be liable for any errors or omissions in this blog.