People with GPS (Global Positioning System) don’t remember that this system was put in place in 1978 for the military with dedicated satellites. While it has evolved exponentially over the past 40 years and is used by governments and industries all over the world, it was a great use of satellites and easier communication.
Entrepreneurs have their own “GPS” to help find small business success—the Business Plan. But unlike its electronic counterparts, a business plan doesn’t come with a pre-programmed route to “Easy Street.” It is up to every aspiring small business owner to collect and analyze information related to a small business idea. Only then can one determine the best way to get that idea from Point A to Point B and beyond.
The prospect of preparing a business plan may seem rather intimidating; it does require a lot of time effort. Most aspiring entrepreneurs soon find the exercise enjoyable and self-sustaining—the more they explore the opportunities and challenges for their idea, the more they want to know. They also realize that just as a poorly programmed GPS will result in getting lost, a poorly prepared business plan will doom their small business dreams.
Preparing a business plan has never been easier. There are plenty of software tools and templates available to guide you through the various sections (e.g., the market analysis; the proposed company description, organization, and management; customer base; financial projections; etc.).
There’s also room for creativity, particularly since the business plan may be used to get banks and other potential investors excited about supporting your venture. For that reason, I recommend “spicing up” a business plan with features such as PowerPoint slides, relevant charts and graphics, and even a website or video.
Whether you present your plan in person or by email, readers’ attention spans are short, and you need to get key information across quickly. When used as part of a loan presentation, it will read a little differently than it will as an internal document primarily for the owner and management people. As a loan document, it will have a number of the same items but will exclude a lot of management analysis.
A business plan is a work in progress. That is because a small business should always evolve and adapt in response to national and local economic changes, new technologies, and shifts in consumer preferences.
I suggest the following schedule for business plan reviews/updates:
- Annually. A basic evaluation. Look for changes in your target market, areas that may need to be reprioritized, and ways to improve the efficiency of your operations.
- Every 3-5 years. A more comprehensive review where the goal is significant growth in sales or revenue.
Finally, after a major shift in your industry or other critical event. Examples include a new regulatory requirement, a natural disaster or act of terrorism, entry of a major new competitor, etc.
There are a number of sources for obtaining a template for a business plan. The one I recommend is at SCORE.org which has a flexible schedule that you can use or delete items as appropriate. It can be downloaded and fitted to your needs.
If you need business advice, mentoring or other financial questions you can contact me directly if you are in this area, or contact SCORE.org to find a SCORE member nearest to you.
David Inskeep is a retired commercial lender and can be reached at [email protected].