Tag Archive | "Business plan"

Business Planning – Your Strategy

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Business Planning – Your Strategy


Too often business plans concentrate on just the numbers, with little explanation on how a business will arrive at a destination .   Just like a road trip, mapping your trip is an important part of the process.

When it’s time for a road trip, how do you plan your route? Do you tend to stick to all the major highways, do you try to save time with a little-known shortcut, or do you end up lost and confused on an unmarked back road?

The business strategy section defines the general direction your business will travel. Typically, strategy is broken into four elements: product, place, price, and promotion, often referred to as “The Four Ps.” Product description and strategy are covered earlier in the plan, so this section should focus on the other three elements. Remember, each decision should contribute to the business’ ability to meet the needs of the target customer.

In the business strategy phase, you will outline a general direction. In the next section, operations, you will expand on this information and address specific steps you will take to achieve your goals.

Place (Location) – Was location important to customers? Have you chosen a business location? Will you need more than one location? What factors are important in your choice of location?

Price – What pricing methods are you using and why? Is the price set by competitors? Is your goal to be highest, lowest, or in the middle, and why?

Promotion- What is your Unique Selling Proposition and how will you promote your product? What types of advertising and marketing will you use? Marketing Expenditures are a significant portion of your total budget, be sure to include a preliminary budget in planning.

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Operations:  Adding Fuel to Your Ideas to Get Your Business Moving

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Operations: Adding Fuel to Your Ideas to Get Your Business Moving


Running a business is like one long road trip and your business plan is your road map.  Staying with the “map” metaphor, the strategy section outlines where you are going and the operations section describes the type of fuel you will put in your engine.  Here you begin the process of  dividing the tasks and responsibilities so no important details are forgotten, and resources are allocated appropriately.

Sales and Sales Management – The plan should include discussion on who will conduct sales and how will they be trained and compensated.

Manufacturing/Supply – Think of manufacturing in broad terms. What is your process for creating and delivering your product or service?

Staffing Issues – Summarize the current key job descriptions and outline a plan for business continuation.

Controls – Recordkeeping and documentation are important parts of your business. Lenders look to your records to be sure there is adequate control over finances. More important, these records will help you as a business owner determine whether you are on track to achieve success. Important records include:

  • Accounting System and Auditors
  • Records for Monitoring Sales Activity
  • Other Marketing Records

Posted in Raising Capital, Starting a BusinessComments Off on Operations: Adding Fuel to Your Ideas to Get Your Business Moving

Common Mistakes Business Owners Make

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Common Mistakes Business Owners Make


While every  business is different, business owners share many common traits.  As a result, they often make the same mistakes as they work on their business plan.   Here is a list of the ten most common mistakes :

  1. No Plan – It is easy to put  off writing a business plan until you have no choice because your banker, investor, or potential landlord requires it. Unfortunately, that is the worst time to try and write a plan.
  2. No Clear Audience – Why do you need a plan? Are you writing for the banker in hopes of getting a loan, or a potential investors or simply to guide your business.  While the outline is the same, the amount of detail required in each section varies depending on the audience.
  3. Too Much Detail or the Wrong Type of Detail – Can you boil down the description of your business to a simple message without getting bogged down in the details?  Limit your product description to an overview, focusing on the problem your product solves and its unique features/  Remember to leave out the jargon and industry slang.
  4. Poorly Defined Customer – Everyone is not your customer. With a clear, specific definition of your target customer, it is easier to write a clear, specific plan.
  5. Limited Market Research – Just because you love your product or idea, it does not mean anyone else will.    (By “anyone,” I mean anyone other than your mom, spouse, or best friend.) Who are these people, and what will make them buy?
  6. Underestimating your Competitors – Everyone has a competitor. Even truly innovative products must deal with competing products or services which may or may not solve the same problem, but ultimately will compete for the end customer’s available resources.
  7. No Meaningful Goals and Milestones – What will you accomplish?  Be specific.  How long will it take you and how will you measure your progress along the way?
  8. Activities Not Tied to Goals – Your goals form the basis of other decisions. Use the planning process to eliminate activities which do not move you closer to your goals.
  9. Unsupported Financial Projections – Unrealistic financial projects with a hockey-stick-shaped growth curve, set up a business for failure when owners spend too much too soon without enough cash reserves to help the business through the startup phase. As you develop financial projections, consider two scenarios: a best case and a worst case.
  10. Inadequate Consideration of Pitfalls – Stuff happens! Things go wrong. When the worst happens, will you be prepared? Having an adequate assessment of risks is not being negative — it is being prepared.
  11. Failure to Communicate – I know, I promised a list of the ten most common mistakes, (but don’t you like getting the little extra from time to time? ) While not directly a part of your document, poor communication will have a detrimental affect on your business. As you write your plan, involve others.  Seek advice from people you respect. Talk to employees, family members, business partners, and advisers, such as your accountant and lawyer.

Need help getting your plan started?  You can download a free copy of my business plan outline

Posted in Business Loans, Managing Your Business, Starting a BusinessComments Off on Common Mistakes Business Owners Make

Every Business Needs a Plan

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Every Business Needs a Plan


As you are in the early planning stages of your new venture, now is a good time to ask your self what direction you will take your business.   Your business plan is a road map, making it  easier to arrive, because you have specific directions and a clear map to  your destination.  Whether you  are looking for external funding, or simply want to get your ideas organized, a written business plan will keep you  on track.

WHAT SHOULD YOUR PLAN CONTAIN?

As you write your business plan, keep your audience in mind! If you are hoping to use this plan to solicit funds be sure to include information which will prove the value of your ideas.

  • Demonstrate Market Focus. Can you clearly describe the needs of potential customers, rather than simply being infatuated with an innovative idea.
  • Evidence of Customer Acceptance. Investors like to know that your new product or service is proven. Provide evidence that your product will sell or is already being used, even if only on a trial or demonstration basis.
  • Believable Forecasts. Entrepreneurs are naturally optimistic when explaining the future prospects for their businesses. Are your forecasts reasonable? If you have no sales, consider including compelling research information which supports your sales forecasts.

Do you need a boost getting started? Download our free business plan outline

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Business Plan Outline

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Business Plan Outline


A business plan helps you  look ahead, allocate resources, focus on key points, and prepare for opportunities and problems. You use it the same way you study a map to plan a route, determine where to turn, and locate key landmarks. A complete plan includes descriptions of the company, product or service, market, forecasts, management team, and financial analysis.  Here is a brief outline of what your plan should contain.

Executive Summary

  • Company description and current status
  • Products/services and market description
  • Company objectives
  • Financial performance and funding plans

History and Position to Date

Here you describe why you started the business, why you believe it will succeed, and how you will define success. It should include:

  • Company background
  • Sales and other achievements
  • Mission, vision, values, and goals
  • Business structure and management team
  • Product/service description

Market Research Includes

  • Description of the target customers
  • Product preferences and purchase influences
  • Market trends
  • Description of the competitors

Business Strategy – Includes all four elements of your business strategy: Product, Price, Place and Promotion.

Operations; This section is not complete without the milestone schedule, a table that captures all the assignments, commitments, and plans that assign timelines and responsibilities.  It should also include your plans for :

  • Sales and sales management
  • Manufacturing/supply
  • Staffing issues
  • Business controls and critical risk

Forecasting and Financials – The plan culminates with the financials. Ultimately, your business plan must boil down to results.

Appendix – What goes into the appendix? Everything else!

Find this interesting? Sign-up for our How to Write a Business Plan in  10 Weeks or purchase my “Business Map: A Practical Guide to Business Planning”

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The Business Plan and Financial Plan – Where a Startup Should Start.

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The Business Plan and Financial Plan – Where a Startup Should Start.


This is a guest blog post by Carl Kinker of The Controllership Group.  You can find Carl’s bio at the end of this post.

Starting a new business can be both exciting and terrifying at the same time. There are many reasons a new business may fail and one of them is a lack of planning. Planning should ideally be done before you open for business but in the real world this is not always the case. Without a business plan how will you measure your progress or if you are on track to achieve your goals and objectives? How do you aim for the target if you haven’t defined the target?

A business plan can range from very detailed and complicated with full blown financial projections and market research to a basic business start up plan. It is always good to seek the advice of your lawyer and accountant who have had experience working with a variety of businesses and can use that knowledge and experience to assist you.

Here are some basic areas that should be in any business plan and this is not all inclusive there are many resources available to help you get started.

  • What is your Business?
  • Who are you and what do you do?
  • What product or services are you selling?
  • What legal/tax structure should you use?
  • Who are the key people in your business?
  • Who or What is your target market?  Include parameters that define your market such as number of employees, revenue, industry, customers, etc.
  • What is your marketing plan to reach your target market? Develop a marketing plan on how you expect to reach this target market – doesn’t need to be complicated but have some plan you can measure.
  • Who is your competition and what is your competitive advantage?

Prepare a financial plan. Be realistic

  • Have a worse case plan and best case plan and then scale both back.
  • How will you price your product or service?
  • Do you know your break even point (including cash flow break even)?
  • What expense will you have? Do you need up front capital to start?
  • What systems do you need to put in place (accounting and other)?
  • Will the business generate enough income to support your lifestyle?
  • Can you finance the business startup?
  • How are you going to get paid?

In summary it is important whatever the stage your business is in to have or develop a business plan. There are resources available and people who can help with this process.

Posted in Starting a BusinessComments Off on The Business Plan and Financial Plan – Where a Startup Should Start.

The “Young Entrepreneur Auction” Bill – An Interesting Idea

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The “Young Entrepreneur Auction” Bill – An Interesting Idea


Indiana Representative Sue Ellsperman (R-Ferdinand) plans to file a bill during the first legislative session of 2011 that would create a “young entrepreneur auction.”  The gist of the bill is this:

  • The Indiana Economic Development Commission would host sessions in different communities. At each session, recent college graduates would each present a business plan to representatives of the community or the community’s economic development organization. The plan would include a list of what would be needed to get the business started — such as space, exposure and mentors.
  • Leaders would go back to their communities and decide if they are interested in any of the proposals. For each one they are interested in, they would develop a bid package to offer the entrepreneur. The Indiana Office of Community and Rural Affairs would be available to help leaders create bid packages.
  • Each of the students, with the help of the state economic development commission, would review all proposals to see which would be the best for a proposed business.

For more see here.

I have not seen a copy of the bill yet, but conceptually this sounds like a great idea.  If communities around the state are able to widely participate, something like this might be successful in matching up young entrepreneurs with communities that have the facilities and talent to give them a chance at success.  Some critical considerations, at least in my mind, include:

  • Making sure there is wide participation around the state – lots of communities will need to get on board. Otherwise, what is the point?
  • If the only “community leaders” who participate wind up being real estate developers and brokers in Indy and Bloomington looking to fill empty office space at discounted rates, this will flop.
  • How is this paid for?  What will the incentives be?  Tax breaks?  Free space?  Grants?

I plan to keep an eye out for this bill and will post a follow up.

What are your thoughts?

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Posted in Indiana Startup News, Starting a Business, Why Indiana?Comments Off on The “Young Entrepreneur Auction” Bill – An Interesting Idea

4 Great Business Plan Tips

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4 Great Business Plan Tips


A friend and colleague of mine, David Castor, wrote a nice, short blog piece on some general guidelines for drafting a good business plan.  His practice is simiar to mine in that we both have quite a few business plans come across our desk – and I completely agree with what he says.  Below is a short bullet point summary of his tips – you can check out the full post here.

1.    Write to the intended audience.  Is the reader the leadership team or potential investors?  If to investors, understand that they have little patience and severe ADD.  The plan should be succinct and to the point.  What does your company do?  What pain are you solving in the market?  How will you do that at a profit?  Think proof of concept, proof of scale, proof of profit.
2.    Focus on math and metrics.  What are your sources and uses?  What are your fixed costs?  What are your variable costs?  What could influence these variables?  Why are the revenue projections correct – they should never be “conservative”.  I hear this all the time, “Our projections are conservative” (note, the investor doesn’t believe you).  If you have done your research, you should know exactly what you expect your projections to be.
3.    Don’t lie, exaggerate or assume.  Actually, exaggerations and undisclosed assumptions are lies – so simply, don’t lie.  My mom taught me this when I was 3.
4.    Know your numbers, your market, and your projections inside out.  There is no reason for guess work in a business plan.  Ask why, when, who, what and how for every line item in the plan.
  1. Write to the intended audience.  Is the reader the leadership team or potential investors?  If to investors, understand that they have little patience and severe ADD.  The plan should be succinct and to the point.  What does your company do?  What pain are you solving in the market?  How will you do that at a profit?  Think proof of concept, proof of scale, proof of profit.
  2. Focus on math and metrics.  What are your sources and uses?  What are your fixed costs?  What are your variable costs?  What could influence these variables?  Why are the revenue projections correct – they should never be “conservative”.  I hear this all the time, “Our projections are conservative” (note, the investor doesn’t believe you).  If you have done your research, you should know exactly what you expect your projections to be.
  3. Don’t lie, exaggerate or assume.  Actually, exaggerations and undisclosed assumptions are lies – so simply, don’t lie.  My mom taught me this when I was 3.
  4. Know your numbers, your market, and your projections inside out.  There is no reason for guess work in a business plan.  Ask why, when, who, what and how for every line item in the plan.
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Posted in Raising Capital, Starting a BusinessComments (1)


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