(Article of mine published for the Vancouver Board of Trade’s Small Business Council in November 2003)
To many people, business plans have a bad reputation. Here are some common misconceptions about business plans.
Making a business plan is no fun. Actually, a business plan follows the same process as planning a vacation. The same questions need to be addressed: where to go, how to get there, how long it lasts, how much it costs, etc. No one seems to have a problem planning vacations.
You need a business plan to get a loan. A business plan is not a “marketing tool” to access funding, it is the very essence of your company.
Business plans are for big corporations, not for small businesses. All companies obey the exact same business, market and accounting rules. Small businesses are simply smaller.
A business plan is about financials. Surprisingly enough, it is not. The financials come at the very end, after all the elements of your business have been thoroughly described and analyzed.
A business plan does not need to be a complicated process. Here are some tips to you get started.
Define the vision and mission for your business.
Start with the sales plan because money flows in from revenue; make sure you have that right from the start.
Know the strengths and weaknesses of your company.
Review the opportunities and threats in your business environment.
Set your objectives and determine your strategies.
Go backwards in your supply chain to identify the cost items directly related to realize the sales, then review all the other cost items. This way, you set up your profit and loss statement.
Only then, quantify all your assumptions. These are the financials and provide possible scenarios for your business.
Do not forget to make a cash-flow statement.
Always be in charge of the plan. If you do not write it yourself, make sure the writer consults with you.
Do not hesitate to involve others and ask for feedback.
To sum up, think of your business plan as the best way to make sure you will still be able to plan vacations in the future.
Copyright 2009 The Happy Future Group Consulting Ltd.