Small business
is the backbone of our nation’s economy.
These days more and more people are chasing “The American Dream” and
going for what they believe is theirs. Folks are quitting their day jobs, risking it all, and going into
business for themselves.
As a former bank
manager I would constantly have people stop by my office to discuss getting a
loan to start their small business. The
problem with that, however, is that the bank should not have been their first
step to acquire funding for their business.
The very first step any entrepreneur should take in their quest to see
their vision become a reality is to create a business plan. Think about it. Without a business plan how could one
effectively communicate their business’ story?
The days of walking
into your local bank and simply requesting a small loan then agreeing to terms
with a firm handshake are over. As if they ever truly existed. With that being said, nowadays lenders and
investors want to see your plan and more importantly your numbers.
To give readers
a better understanding of the importance of business planning I have researched
and reviewed two recognized experts in the field of writing business plans. The information that these two individuals
provide is vital to any business plan and should be applied to many.
Tim Berry is all about business planning. He has been referred to as “The Obi-wan Kenobe of Business
Planning” and “The Father of Business Planning”. Tim has written many books on planning with
his Stanford MBA degree, MA from the University of Oregon, and BA in Literature
from the University of Notre Dame to back him. As a founder,
consultant, co-founder, and investor, this successful entrepreneur has seen
business plans and business planning from a lot of different viewpoints. Tim is the official business planning coach
at Entrepreneur.com.
Tim believes
that one of the most important pieces of the business plan is determining your
“Goals and Objectives”. “One of the most
important reasons to plan your plan is that you may be held accountable for the
projections and proposals it contains. That's especially true if you use your
plan to raise money to finance your company,” says Berry.
Goals and
Objectives Checklist
via
Entrpreneur.com
If you're having
trouble deciding what your goals and objectives are, here are some questions to
ask yourself:
- How determined am I to see this succeed?
- Am I willing to invest my own money and work long hours
for no pay, sacrificing personal time and lifestyle, maybe for years?
- What's going to happen to me if this venture doesn't
work out?
- If it does succeed, how many employees will this
company eventually have?
- What will be its annual revenues in a year? Five years?
- What will be its market share in that time frame?
- Will it be a niche marketer, or will it sell a broad
spectrum of good and services?
- What are my plans for geographic expansion? Local?
National? Global?
- Am I going to be a hands-on manager, or will I delegate
a large proportion of tasks to others?
- If I delegate, what sorts of tasks will I share? Sales?
Technical? Others?
- How comfortable am I taking direction from others? Could I work with partners or investors who demand input into the company's management? Is it going to remain independent and privately owned, or will it eventually be acquired or go public?
Noor Shawwa is the founder of ThinkDoBusiness.com which helps technical entrepreneurs and first time managers to “think and do” business better. He has lectured on entrepreneurship and business strategy and worked for some fast-growing online businesses. Shawwa believes that your business plan allows you to map out where the huge land mines that claim most victims are and navigate your way around them.
Noor Shawwa
states that there are three key ingredients to every good business plan.
1. Analysis
This
is where you make sense of your Market, Industry, and Competitors.
2. Action
This
is where you lay out how you will run your business based on what you know
about your customers, industry, and competitors.
3. Results
This
is where you show and forecast results of the business based on your analysis
and decisions.
“The rest of the
business plan works around these three building blocks,” says Shawwa.
Key takeaway:
When it’s finally time to get down to business, always have a plan…both literally
and physically.
