Business Planning Guide
Here is a business planning outline you can use to help you make your idea come alive.
Dan Miller www.48Days.net
The master in the art of living makes little distinction between his work and his play, his labor and his leisure, his mind and his body, his information and his recreation, his love and his religion. He hardly knows which is which. He simply pursues his vision of excellence at whatever he does, leaving others to decide whether he is working or playing. To him he is always doing both. James Michener
Success of any kind is not an automatic process. Growing older does not necessarily make you wiser or more successful – some people just get old.
If you are going to be successful it will be the result of clear intention. The secret of your success is not determined by nature or nurture – but by your daily activities. Each day you are either making deposits in or withdrawals from your success possibilities. Nature may account for ___10%______ of your success and nurture another ___10%__________. But _____80%______ of your success will be determined by your daily decisions – from today forward.
1. A good business plan helps define a goal. You cannot hit a target you cannot see. A business plan is essential. If you can’t see your business on paper, you will never see it in reality. It will help you focus on what is unique about your business and will give you a roadmap for the first few months. Create a plan for where you want to be five years from now – then you can work backward to know what needs to be done today.
2. A plan addresses four basic questions:
- What is our WOW?
- You You have to be the best at something. You want to do something that is fresh, innovative, impressive and memorable.
- Where are we now?
- Where do we want to go?
- How will we get there?
3. A Plan:
- Provides a path to follow. A plan “creates” the future and makes it what you want it to be. Prevents just “going with the flow”.
- Provides a tool to which you can add a “statement of purpose” and take it to the bank, investor, or buyer.
- Helps one develop as an owner/manager. It can give you practice in thinking about competitive conditions, promotional opportunities, and situations that are advantageous to your business. Practicing this over a long period of time can increase your ability to make good judgments.
These are limiting factors:
- Risk Aversion. What is “risk?”
- Indecision. “Indecision is the greatest thief of opportunity.” How can you combat indecision?
- Procrastination. Defined by counselors as Hidden Anger.
- May be camouflaged by statements like:
- “I tried it before and failed.”
- “I’m afraid to move forward.”
- “How do I start something while still having a full-time job?”
- “I have kids.”
- “I’m just too busy.”
- Money – or lack thereof
- Limiting statements like these may creep in:
- “I have none to start a business.”
- “I’ll never be able to get started.”
69% of all new businesses require less than ___$10,000______________ to get started.
24% require _____zero______________ in start-up capital.
“Without ambition one starts nothing. Without work one finishes nothing. The prize will not be sent to you. You have to win it. The man who knows how will always have a job. The man who also knows why will always be his boss.”
— Ralph Waldo Emerson, American philosopher, poet and essayist
Other important issues:
- What opportunities are scams and what are legitimate – and how do I tell the difference?
- Does my business need to be connected to my purpose and calling?
- How do I handle taxes, insurance and retirement?
- What about health insurance?
- My spouse is not supportive. What should I do?
- Are there different forms of self-employment?
- Yes, you may be described as a free-lancer, a consultant, a contingency worker, an independent contractor, an entrepreneur, an electronic immigrant, a temp, or a number of other growing terms. All are reasonable terms for the creative, non-traditional work models that are allowing 465,000 new business startups each month in the United States alone.
48Days.net offers solutions, including:
1. Business leadership, guidance & mentoring
2. A like-minded community of your peers – others cheering you on
3. Up-to-date technology to give you a professional look and functionality
4. Resources that are effective and affordable
II. Develop Answers To These Questions:
1. Why Am In Business?
– to be my own boss
– to make money
– to control time and work hours
– to help people
– to serve community
– to have business for my own use
2. What Business Am I In?
Many business owners have difficulty because they are confused about this.
- What services do customers ask for that I do not offer?
- What is it I’m trying to do better than the competition?
- What are my basic services, products, etc.?
- Do I need Physical offices – or an Internet business?
3. What Is My Business Plan? The key components of a plan are:
A. Description of Business
B. The Market
C. Management & Personnel
D. Ownership Structure
E. Financial Data & Plan
“Get excited and enthusiastic about your own dream.
This excitement is like a forest fire — you can smell it, taste it,
and see it from a mile away.” — Denis Waitley
III. Development of Plan
A. Description of Business
1. Describe the Business
2. Name of Business. Do I need to file a business name? Call the license division of your Secretary of State to check on the availability of a name. They can usually do this while you wait on the phone. If you form a corporation, this check will be done. You can also do a quick check on the Internet. If you are still looking for a name, check here on how to create a great name: http://entrepreneurs.about.com/cs/gettingstarted/ht/business_name.htm . You can trademark your business name for $5.00 in most states. A national trademark will cost $375.00. If you plan on doing business outside of your home state it is a good idea to do that. You can go directly to the United States Patent and Trademark Office to check on national availability of any name: http://www.uspto.gov/ You will also want to get the Internet URL domain for your business. (This is more important than having a trademark)
3. Brief History. If you are just starting your business, describe how and why you came up with this idea.
4. Unique Services Offered. What is my Unique Selling Proposition? (USP) Remember, you only have to do something 10% better or provide added value to be successful.
5. Hours of Operation. Keep in mind you must make it easy for your customers; at the same time, you cannot violate your personal and family priorities.
6. How do my customers view my business? If you don’t know, ask them. Your customers can be your most valuable source of information about how you are doing.
7. What are my business’ six greatest strengths? Not just my USP, but what are the other things I do extremely well? Prompt reply to phone inquires, 24 hour delivery, wide selection of products, guaranteed results, free shipping, etc.
What are my business’ six greatest challenges?
Goals for the Future:
Where do I want to be 5 years from now? Every successful person or business has a vision of where they will be 5 years down the road.
Will I need to expand or change services, the facility, purchase equipment?
B. The Market
1. What type of business do I have — what is my product?
2. Describe my market. Surprisingly, many business owners fail to do this.
3. Outline the demographics of my market: Size, Location, Age, Geographic area, Etc.
4. Outline the characteristics of my customers: Income level, Age, Social Status, Etc.
5. What is my position in the marketplace?
A. – Who are my competitors; how many of them are there: how many of them are profitable? If you are unsure, go out, find your competitors, and talk to them.
B. – Do they have any advantages over me? Pricing, location, reputation?
C. – How many similar businesses went out of business in the last 3 years?
D. – How many new ones opened up?
6. Do I have any market niches?
7. How would I like to change my image in the community?
8. How many customers do I want? Is it more important to keep current customers or attract new ones? How can I move people from the universe to prospects, and then to customers? Will I have repeat sales to the same customers, or will I need new people each time?
9. How am I attracting new customers?
- – Advertising & Promotion (See the Guerilla Marketing material in next section.)
10. Should I be going after new markets?
Additional Marketing Ideas
Here are 48 more:
- 1. Give your service away for free – with caution.
- 2. Lead a workshop through your local church, Chamber of Commerce, or civic group.
- 3. Start a free newsletter. http://www.qksrv.net/click-1373931-1668329
- 4. Create a 20, 40 and 60-minute presentation on your area of expertise.
- 5. Speak to a group 2-3 times a month.
- 6. Start a blog. I use http://wordpress.com/ — a free service. A blog is a window into who you are.
- 7. Do a weekly podcast. I use http://audacity.sourceforge.net/ — a free download.
- 8. Send an op-ed piece to your local newspaper or business publication.
- 9. Submit an article to 30 different magazines and newspapers. Use the Writer’s Market for leads: http://tinyurl.com/37psfa
- 10. Send out press releases: http://www.prweb.com
- 11. Do something newsworthy.
- 12. Give away a one-hundred point check-list for success in your area of expertise.
- 13. Give away free audio CDs on your specialty. Tell people everything you know about achieving success in that area.
- 14. Offer to help someone in the news who could use your help.
- 15. Be an expert on a local radio show.
- 16. Join a local professional organization.
- 17. Have three basic programs and pricing packages.
- 18. Be clear on what you can and cannot provide.
- 19. Identify 30-40 referral sources. Become a resource of information for them.
- 20. Immediately acknowledge a referral.
- 21. Send creative thank-you gifts to referrals.
- 22. If you are looking for corporate clients, use Nurture Marketing: http://www.nurturemarketing.com/
- 23. Practice the skill of converting leads to clients.
- 24. Underpromise – Overdeliver.
- 25. Develop a great logo: http://www.1800mylogo.com
- 26. Use Fusion Marketing. Identify other companies that have the same kind of target clients and the same standards of excellence that you have.
- 27. Experiment with talk radio ads.
- 28. Find targeted mailing lists. http://www.usadata.com/ Lots of them available.
- 29. Have an exhibit booth at connected trade shows.
- 30. Check prominent speakers’ schedules. Often there is an opportunity to have a booth at the back of the room.
- 31. Continue contact with your customers. Do 90-day, 6-month checkups.
- 32. Have an updated website for easy access to information.
- 33. Send birthday cards, anniversary of first purchase, benchmarks, etc.
- 34. Join three organizations whose members would be ideal clients for you.
- 35. Have clear personal goals – and honor them for success in all life areas.
- 36. Have lunch twice a week with someone you can learn from.
- 37. Write at least one note of encouragement each day to someone.
- 38. Generate so many business requests that you can comfortably select where you will be most effective – and then refer the rest to other appropriate businesses.
- 39. Ask for the order – be fearless; you’ve got to close the sale!
- 40. Get to know the top competitors in your field.
- 41. Email communication with 10 other people doing the same thing you are this month.
- 42. Have a personal MasterMind group or group of advisors.
- 43. Be extremely intentional about the use of your time. Plan for research and reading, personal growth, relaxation, physical health, etc.
- 44. Recognize that 20% of your work time in the first year should be spent in marketing.
- 45. Attend 2-3 major conferences each year.
- 46. Read 3-4 magazines each month. You need to stay informed for intelligent conversations with your clients. Try Fast Company, INC, Success, Entrepreneur.
- 47. Start a great magazine in your specialty.
- 48. Have an amazing “Elevator Speech.”
C. Management & Personnel
The most critical components of the success of a business today are the management
team and the supporting staff personnel.
1. What does my organizational chart look like?
2. What is the role of the owner/manager?
3. What are staff qualifications, training, and compensation?
(Critical element — this is where you can dramatically rise above the competition.)
4. Are job descriptions and expectations clear? Who does what, where, how and when?
If job descriptions are not clear, you set people up to fail.
5. How do I recruit new staff members? What do I need to look for?
(Always value personal skills over technical skills.)
6. How are staff involved in goals and visions of the business?
Unless a person takes charge of them, both work and free time are likely to be disappointing.
D. Ownership Structure
1. Am I a sole proprietorship, partnership, “S” corporation, C Corporation, or LLC?
2. How do I handle insurance? http://www.48days.com/FAQs.php#INSURANCE
3. What would happen if I were no longer around?
4. What is my business worth? Even if your business is just starting, begin to think
about it in terms of having a stand alone value.
5. Do I have an exit plan? If you died, what would happen to your Business? If your partner decides to go live in the Rockies next year, what would happen to her ownership share? How would you determine a value?
E. Financial Data & Plans
1. How is money generated? Is there just one source of revenue, or can I identify multiple streams of income? You may have walk in sales, Internet sales, direct mail marketing, occasional flea market or street fair, and corporate purchases.
2. Price options on goods or services?
Payment options — prepay, monthly, contracts? Can you increase sales
by providing more options without risking costly receivables, etc?
3. What new equipment do I need in the next 3 years? Copiers wear out, computers become outdated quickly, lawn mowers break parts. Be realistic here.
4. Revenue per customer or item sold.
– Can we generate more revenue per customer as well as seek new customers?
5. Revenue per square foot in facility. Yes, this is the way we look at any business. Are you wasting space? How could you increase revenue per square foot?
6. Do I set and record monthly sales goals? Don’t just see what happens. Set benchmarks and define what would have to happen each week and each day to achieve those goals.
7. How do I project and control monthly cash flow? What is my break even point? Don’t wait until the end of the month to see how you are doing financially. Put systems in place so you can see daily how income and expenses are doing.
8. Who will maintain daily financial records? (Keep this as a priority. Remember, poor financial controls are a major cause of business failure. If you are not good at this, enlist the services of someone who is.)
9. How will I withdraw my own compensation? What do I expect for a personal balance sheet? ( Even with no employees, it’s wise to have a payroll company issue paychecks. What they provide in keeping your current on taxes is invaluable.)
10. Should I buy or lease new equipment? Look at these options with your accountant.
11. What options do I have for financing? How will I raise more money if I need to put more in before the business shows a profit?
12. What insurance, lease or rental agreements will need to be negotiated?
To check out applied business models and to see people using these principles — check out the 48Days.net: http://www.48Days.net