Yes. Now that you’re ready to start a business from scratch, what’s the one thing that you should do now that will help you? Write a business plan. Take time to think things through completely. Yes. Do this even though you are bootstrapping your startup and not trying to raise any money.
A Root Canal?
A big mistake: Don’t equate writing a business plan as the equivalent of getting a root canal. The smart, successful entrepreneurs take a different approach. A different mindset towards writing a business plan.
They don’t look at it as a painful experience. They look at is as an opportunity. An opportunity to survive, grow and prosper. And not having to go back and work for someone else again.
Business Plan Defined
A business plan? Just a written description of what you are going to do and how you are going to do it. It will force you to think about every aspect of the new business. Especially marketing and sales. Most people jump into entrepreneurship with limited, narrow skill sets. (Including this one)
As a new entrepreneur, you need to know and understand a little about everything. Especially early on, when you are the chief, cook and bottle washer.
WHY? Top 10 Reasons
- You’ve never started a business before.
- You don’t want to lose your life savings.
- You don’t have a marketing and sales background.
- You don’t understand the numbers.
- You don’t understand intellectual property.
- You don’t understand technology.
- You need to raise money from bankers or investors.
- You don’t want startup failure.
- You need to form strategic alliances with bigger companies.
- See #1 again!
Mandatory Components
Now you know what a business plan is and why it’s important. Now what needs to be in it? Here are the 16 key sections that should be included in a well thought-out, credible and persuasive business plan:
- Executive Summary.
- Source and uses of funds.
- Company objectives.
- Mission.
- Keys to success.
- Company summary.
- Service/Product description.
- Consultants to planning process.
- Analysis.
- Marketing.
- Sales
- Management.
- Operations.
- Technology.
- Financials.
- Illustrative. (Show and tell)
Marketing and Sales
All sections are important. But really focus on these two sections. A tip for future entrepreneurs: Learn as much as you can about marketing and sales. A tip for those just starting their careers, but know that entrepreneurship is their future: Get as much sales and marketing experience as you can from your company.
Marketing-How are you going to find clients or customers? Tip: Want startup success, try publicity.
Want startup success, try publicity
Sales– How are you going to sign them up? Nothing else matters unless you have paying customers. It’s true, most startups fail. Why? A lack of marketing and sales.
Best Time to Write One?
Before you start the business. While keeping your day job and still collecting a regular paycheck and insurance. Write your business plan at night, on the weekends or on your days off. A big, big bonus reason? You might find that after writing your draft, you decide it was not really a good, sound idea after all. And scratch the plans. Thereby, potentially saving you both valuable time and money. Maybe even your marriage.
Worst Time to Write One?
When you are under the gun. Panic begins to set in with the entrepreneur or small business owner, (who is running out of money) when a banker or investor asks the question; “Where’s your business plan?” Now the business gets neglected at the worst time. And the owner now has to “stop the presses” and write the plan.
You’re not going to do your best thinking, writing under tight time constraints. This will reflect in the quality of your work. If the money people don’t have confidence in the plan? No deal, no money.
Halloween
It’s true. Starting a business is scary for most people. Overcome your startup fears by writing a business plan. To succeed, you need to know what you are doing. Otherwise, you are setting yourself up for a potential train wreck. Worse, having to give up on your dream.
Overcome your startup fears
Sacrifice
Writing a well-thought-out plan takes time. A certain amount of sacrifice will be needed. What’s more important, watching the game or movie? Or doing something that can help you control your own time, income and destiny? A short-term sacrifice for a long-term gain. Not enough hours in the day to do absolutely everything.
Lose the Mumbo-Jumbo
Want to dramatically improve your chances of getting startup, expansion funds from investors? A successful sales pitch cuts out mumbo-jumbo. Said Guy Kawaski, one of the early individuals behind the success of the Apple Mac: “Neil, I read your Wall Street Journal piece. We are in total agreement, that’s for sure! Guy.”
The money people want to see straightforward English in a business plan. They don’t want to guess what the business model is. They want to read it and immediately understand it. So, they can decide right away to continue or take a pass.
Final Thoughts
Most people will talk about starting-up, but won’t. But for those that do, help yourself by writing a business plan. This will be a very valuable learning opportunity. Startup and survive! The old adage is true; “failing to plan is planning to fail.”
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