Producing a Business Plan

I’m about to take you through the journey of developing a business plan. It’s not a pain-free or a hassle-free process, I must warn. You may reach some steps that will be overwhelming or baffling, somewhat challenging your patience. It might be tempting to quit — maybe ditch the idea altogether.

Go easy on yourself. Writing a business plan is intended to be challenging, ensuring you know about “running the business” before “starting the business.”

Right now, you’re likely experiencing one of the most exhilarating times of your life. You’re nervous, no doubt, which adds undue stress and can sometimes turn a chewable project into one far more challenging because your logic, vision, and sensibility is clouded.

Mapping out your business is a nerve-wracking process — a necessary evil, as you know. Much like professional athletes spend months or maybe years preparing for a specific sports event, a new business owner spends just as much prep time conceptualizing and developing a foundation for doing business.

Writing a business plan not only prepares you for the “adventure” ahead, it also ensures you’re ready for the business itself. How many businesses have failed to launch with business plans now collecting dust on a shelf, or maybe buried within a desk drawer?

But you’re going to be different, right? You’ll face this task head-on, channeling your stress to complete a phenomenal plan that broadly and deeply highlights that next great success story; your business. Much like I mentioned above, go easy. Take your time. Remember, completing a business plan is likely something you’re doing for the first time.

I remember researching, compiling data, and writing my first business plan.

As a military wife, I found it difficult to find a job and thankfully was invited to attend a state-funded business program while my husband and I were stationed in Sumter, South Carolina.

The program was designed to spark new businesses; and since I was unemployed and facing routine visits to the unemployment office, I had nothing to lose.

Participating in the program not only provided me with a weekly stipend, it provided a free computer to boot … we’re talking 1995, so that was a huge perk.

The program flew as I absorbed everything. As part of the curricula, I completed an in-depth business plan in order to graduate. Writing the plan seemed foreign to me. I found it super challenging probably because of my inexperience relative to all things business.

Involvement in that business program opened my eyes to the possibilities and changed my life forever.

What also made the business plan challenging was I entering a somewhat new industry. You see, I started during a time when people said “You do what? People pay for that?” Yes, those very words were expressed to me many times. I was hardly the first to carve a path in the career industry but resume writers, career/life coaches, interview trainers, and so on, were around but certainly not as prominent as they are now.

Words used to describe business plan preparation: readiness, anticipation, and preliminary measurement. Don’t underestimate the value of preparation.

Expect to spend countless hours of research, data collection, analysis, and compiling/reporting … no lie! Next to running your business, pulling together data and writing your business plan will be the most time consuming and intensive first step.

Of course, there’s a reason for this. Starting a business isn’t something that one should take lightly. High numbers of businesses close within a few short years, and without preparing a business plan, those numbers would likely be considerably higher. The initial prep work also deters costly surprises.

A huge mistake I made back in 1999 was to avoid learning when the advertising cycle began for my area yellow pages. I started in April 1999, whereas approved YP advertising submissions were required at the end of February. For this, I lost 10 months of YP advertising time, costing me thousands in lost revenues during the first year. The error also forced me to increase my newspaper advertisements to help offset the lost revenues.

The business plan isn’t all pain and suffering, however. It can be intriguing and fun as well. For those pre-disposed to entrepreneurship, like I am, you’ll find creative juices oozing from your entire being. Ideas for services and customer relationship management (CRM) strategies, for example, will surface with little effort. Your mind just won’t shut off. Expect to “live and breathe” your business idea until you’re drained.

That’s a good problem, actually! I have lists of ideas generated from my early days that still offer inspiration and contribute to my successes today.

Some of the topics I pondered in the beginning included …
» Will I have my family’s support during the start-up?
» Can my family handle the financial challenges?
» Is there demand for my proposed business?
» Do I ultimately want to do this?
» Do I have the commitment needed to thrive?
» Do I have the drive to succeed?

Skeleton of a Business Plan

What makes up a business plan?
A business plan outlines the business infrastructure, scope of your products and services, client demographics, suppliers, marketing/advertising, staffing requirements, forecasted sales and revenue details.

Typical business plan categories include …

» Business Description
» Executive Summary
» Products & Services
» Sales & Marketing Plan
» Internal Logistics Plan (Operational)
» Financial Reports (P&L, Budgeting)

Business plan topics are broad and deep, and therefore, categories may fluctuate depending upon the exact scope of your business. You may consider going a completely different direction with the plan’s table of contents —- and that’s perfectly fine.

Business Description

Just as it sounds, writing a business description could entail goals, hours of operation, pricing, location and overall business description (goals, customer focus, niche), just to name a few.

I say “could” because it’s your plan, so outline thee details you feel are necessary to list.

The Business Description will challenge you to review the smallest of details. The example business plan presented within this book has the business description and executive summary combined. As mentioned above, categories within a business plan can be flexible and don’t need to follow a specific outline, per se.

Funding
» Starting capital required?
» Operating capital required?
» Projected accounts receivable and account payable figures.
» How long will it take me to repay loaned monies?
» Do I have access to monies should my business slump?

Vendors/Service Solutions
» Who will supply my business with paper supplies and other materials?
» What stock levels are needed for 6 months, 12 months?
» Will I offer promotional materials?
» Who will provide virtual assistance services?

Credentialing
» What industry certifications are required for business growth?
» What are the costs?
» What are the re-credentialing requirements?
» Is credentialing required for my client demographic?
» Who offers high-value credentialing programs? (Visit my glossary of credentials)

Licensing/Insurance/Taxes
» Who will supply liability insurance, and at what cost?
» What licensing/zoning requirements apply to my business?
» Am I required to charge my clients sales tax?
» Will I pay in estimated federal taxes?

Executive Summary

Noted as being an important facet of a business plan, an executive summary should outline the overall marketing and business development strategies forecasted for business growth. This section can also include details of your market research, mission statement, advertising tactics, and business advantages. Feel free to also include details about your competition and how your service will differ.

Product & Service Logistics

» What timetable is needed to deliver top-of-the-line service?
» Will I offer a guarantee to clients?
» Will I offer packages, ala carte items, or both?
» What form of delivery will I use for products/services?

Sales & Marketing Plan

Once your target audience research is complete, including an analysis of sales and marketing expenses in comparison with forecasted income from these conduits, you will have an in-depth look into the sales and marketing portion of your business.

Sales and marketing encompasses paid advertising, yellow paid advertisements, costs associated with industry promotions, social networking, strategic alliances/partnerships, vertical/horizontal business channels, and so on.

Marketing/Advertising
» What advertising channels will work best?
» What’s my overall marketing plan?
» What are the most effective ways to reach my target client base?
» Online and offline strategies
» What are the costs?

Competitors
» Who are my competitors?
» How does my service stand out from the competition?
» What are my pricing tiers? Target hourly rate?
» Have I priced my services in correlation with my competitors — and in accordance with my experience and credential level?

Client Demographic
» Will my business be limited to my service area or exposed locally, nationally, and internationally?
» How will I reach my client demographic?
» Will I focus on a specific niche or a broad target audience?
» Are there organizations or professional business groups that will help me reach that client audience?
» Describe personal and professional assets applicable to my demographic.

Financial Plan

A financial plan projects all the financials of your business; e.g. forecasted revenue and expenses. By guesstimating incoming revenues versus outgoing expenditures, a business manager can review budgeting and profit and loss (P&L) totals, examining and responding to those reports accordingly.

If your business hasn’t gotten off the ground just yet, you can modify those totals to reflect forecasted or targeted financial amounts.

The financial portion of the plan can consist of various income, disbursement, sales, and profit charts. Other forms in this category: balance sheet (assets plus liabilities = net worth), income statement (income less expenses = net income), and disbursement/receipt projections.

Upfront, know the following business plan is for a fictitious company. What I did however was to utilize the business plan I wrote back in the 1990’s as a base, building from it to integrate elements from my current business. You should also know the financials are not indicative of those for my business.

A business plan serves key purposes beyond information gathering to help you with the start-up phases of your business. 

For example, a business plan be used when requesting financial backing from a bank or to private investors, or as part of the application process to the United States Small Business Administration (sba.gov) for a loan. Your business plan can provide initial investors and loan agents with the information needed for determining your credit worthiness.