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GET A PLAN MAN! Part One
By Frank Fiore
A business doesn't plan to fail, it fails to plan.
So if you want your new online business to be a success you'll need to plan for that success and to do that you’re going to need a business plan. A business plan acts as a road map for your company. It clearly states who you are, what you do, and how you do it. The process of writing the business plan is just as valuable as the finished product. Just the process of thinking through all the elements of the plan will help you avoid mistakes and even uncover some hidden opportunities. Now, the business plan process includes thinking about your business, discussing it with others, researching your market, and analyzing your competition.
Besides acting as a plan for the success of your business, there's another reason to write a business plan. If you ever want to raise money from established capital sources like investment banks and venture capitalists, a business plan is essential.
If your business plan is, "I plan to be in business," that's not enough. A good business plan helps you focus on your business concept, provide a framework to develop your business idea, serves as a basis for discussion with investors, and gives you a way to measure your business assumptions and performance that can be reviewed over time. It also will give you a clear understanding of your business objectives, strategies, and financial viability.
Here’s a couple of tips to get started.
First, you can download a free shareware <a href=http://www.planware.org/exldown.htm>Business Plan Template</a> called Exl-Plan where you can choose from different versions of the software based on the size of your business. Second, if you want to test your business plan skills before you start on yours, why not experiment on someone else's. <a href=http://home3.americanexpress.com/smallbusiness/resources/starting/biz_plan/try/>American Express</a> has a business plan exercise that you can use at their Web site. You can test your skills on a fictional business plan and then be rated on how prepared you are to create your own. Very useful.
Don't kid yourself, though, writing a business plan is not easy. It takes a lot of time and hard work. It will take weeks - even months to write a good plan. So here are some general tips that can help you through it.
First, make a list of your new company's strengths, and its weaknesses; the market threats and the opportunities. Don't write a tome. Keep your plan short and to the point - no more than 20 pages or so. Then nail down your assumptions. Be realistic about your projections and base your assumptions on your market research and analysis.
Next, make a list of your business risks. Be honest with yourself. Every business has competition. Who are they and how will they impact your business. List other risks like potential changes in your market, personnel challenges, and technology risks. If you’re trying to attract capital, this shows that you've given thought to both the upside and downside of your business. Don't make statements you can't support. A good business is not built on wishful thinking. Back up your claims with research and analysis. Also, don't use highly technical terms. Keep the wording simple or if you must use technical terms, explain them fully in your plan.
Finally, a business plan is never finished. It's a living document that should be updated frequently as you move through your plan. You'll be surprised how many times you'll modify your activities when new market opportunities present themselves simply because you <i>are</i> in business.
One last thought. Should you hire someone to write your business plan? The answer is "No." Only you have full understanding of your business model.
There are many companies that offer business plan writing services and there are a number of software packages on the market that claim to do the same. The truth is, the best they can do is show you a format to follow. You will have to do the research, think through the risks and opportunities, create the marketing hooks, and come up with your financial assumptions - that is, provide the bulk of the material for your plan.
But what does a business plan look like? Are there sample plans that you could see? The answer to that question is "Yes." In fact, by studying sample business plans you can see how a typical plan is organized and that way you can make sure that your plan covers all the bases.
Before staring on your business plan, it's a good idea to see what a plan actually looks like. Here are two Web sites that provide sample plans for your review. Just remember, these are just samples. They can only give you an idea of how a plan is organized and the type of materials that need to be included. Your business plan will differ dramatically.
First stop is <a href=http://www.bplans.com/>BizPlans.com</a>. BizPlans is a very good resource not only for sample business plans but also sample marketing plans. It also provides a Planning Spreadsheet Glossary that explains the details of a business plan spreadsheet. They provide this free service to attract traffic to their site and to sell their business plan writing software package.
Now let's discuss the sample plans.
First, go to http://www.bplans.com/sp/. On this page you'll see a selection of more than two dozen sample business plans. Select a sample plan to view. There you'll see the title of the business plan and a brief description of the business. You'll notice that you can either view the plan step-by-step through your browser or download the plan onto your computer for viewing later.
Can't decide which sample plan to view? Want to know which plans best match your business concept? Then BizPlans.com offers another useful service called the <a href=http://www.bplans.com/pw/>Plan Wizard</a>. By answering just a few questions, their Plan Wizard recommends the sample plans on their site that match your business.
You can create and even write a <a href=http://www.bplans.com/mp/>mini-business plan</a> live on the Web to test your business idea - and it's free. The free process can help you test your business objectives, define its mission, analyze the market, and determine your break-even point.
If you're looking for real plans - and top-notch ones to boot - then check out the business plan examples at the <a href=http://www.businessplans.org/MootCorp.html>MootCorp Competition</a>. They offer a library of different award-winning business plans. Each was a winner or a finalist in the MootCorp Competition. MBAs from the best business schools in the world were invited to present their business plans to a panel of investors who then chose the best new executive summary, business concept, proposed offer and financial model.
Now that you have an idea of what a business plan looks like, next week, in Part Two, I’ll show you how to write your own.
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