Writing a Business Plan?
April 4, 2007
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Today’s Magic Wand: I’m writing the business plan for Start Up Princess right now. Are you writing one too? I know it probably isn’t your most fun project, but it’s vitally important for creating the direction of your company and for your own sanity and success! Not to mention that formal funding requires them and any investors (including friends and family) will want to see your plan. If this is completely new to you, you might consult your small business development center to see sample plans and go over the details of each section with an advisor. I also recommend Palo Alto Business Plan software. I used this software program as an outline for my first plan and it helped me to get into business plan competitions and win nationally. Here is an outline of what I use now:
Executive Summary
Objectives
Use of Funds
Mission
Company Summary
Phase 1
Phase 2
Company Location & Facilities
Start Up Summary
Keys to Success
Market Analysis
Target Market
Customer Trends and Demographics
Market Needs
Market Trends
SUP Positioning
Target Audience
Benefit
Reason to Believe
Dramatic Difference
Main Competitors
Competitive Differentiation
SWOT Analysis (Strengths, Weaknesses, Opportunities, Threats)
Marketing Mix
Products & Services
Fulfillment
Technology
Price
Place- Distributing a Service
Promotion Strategy:
Branding
Print Media
Website/Blog
Advertising/PR
Marketing Programs
Sales Strategy
Web Plan Summary
Strategy and Implementation Summary
Strategic Alliances
Management Team
Bios
Financial Plan
Use of Funds
Revenue Sources
Revenue Drivers spreadsheet
Product Sales/Services Outline
Growth and Scalability
Projections 5 year Growth
Projected Income Statement and Statement of Cash Flows 5 year Spreadsheet
Balance Sheet:
(with Assumptions)
Summary of Assumptions Used in Forecasting
As part of the financial plans, Bill Bartmann says your accounting firm is the most important aspect as far as investors or potentials for loans go. He has borrowed $3.2 billion dollars for startups. He claims he has had more transactions and borrowed more money than anyone in the world. He suggests finding the best firm (not single accountant) and never using a relative. In many of his companies the accounting firm was the highest expense the first year (over 60% of expenses).
And his silver bullet—include an employee handbook as part of the business plan. The handbook shows potential investors your business can be systematized, grow and continue to run without you. Almost no one else includes them except for his students.
Excellent point, bro about accounting firms. I have also heard this. You can also write, I intend to use _____ when funding is secured.
I just wanted to add that the eMyth also discusses the handbook point, that’s an excellent resource for creating the systems for duplication and getting the owner out of the business (which should be your goal) if you want to duplicate and make the business run itself.
His point in having the best accounting firm on board before the funding is secured is that they are less likely to fudge the numbers in your favor and the banks and investors know that. In his thinking, the accounting firm gets the funding not vice versa. That’s his advice though. I’ve never borrowed a billion dollars so I don’t know myself.
He says, lots of people have handbooks, they just don’t include them as part of the business plans they give to potential investors or loan proposals. eMyth was started by one of his students. (maybe that’s a myth) hahaha.
Good point, if you CAN do that, do it. I didn’t have the funds to hire a firm like that at the finding investors stage, but sounds great for people who need a lot of funding and have a budget to work with. For those who don’t have the funding to hire big at the start, you can have a accountant create an excel doc that has formulas built in it so that the investors can play with the number regarding “best case scenario” and “worst case scenario” so they know what the differences could be.
I wanted to share a free interactive business planning tool with the community.
The Interactive Business Planner (IBP) is a free Internet-based application designed as a self-service tool for entrepreneurs in the creation of a 3-year business plan.
I am using it for my plan and so far so good.
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