The business plan. It is a required document that provides comprehensive details of your new business, with the goal of receiving funding. But…it serves other purposes, as well.
Usually 30-60 pages long, depending on the scope of the start-up, a traditional business plan includes 3 or 5 year Income and Expense projections, break-even projections, balance sheet and other documents that provide credible and substantive support to the document.
The majority of my business plan clients contact me because they are seeking financial support to either add to their existing business or to start a new business. I love seeing their reaction when they first receive the finished product. Some cry because of the overwhelming realization that their dream is on its way to becoming true. Others light up with joy, as they realize that they hold in their hand the blueprint of their vision, a compass showing them where they are taking their business.
Why not use the business plan for your purposes? Your business plan can be a blueprint for you! Updated every three to five years, it represents the process by which you examine, assess, plan and implement strategic actions that direct your company to the next stage of its development. It does not mean that it has to be as thick as a book that you shove in the back of your desk drawer. Rather, it can be a living document that provides you with the framework to by which you assess, adjust, evaluate and implement corrective actions.
Just as you would hire an engineer to create a blueprint to build an addition to your house, a blueprint for your business is just as vital. The purpose of the business plan is to provide you with the objectives, details, financial analysis, market assessment and guidance to steer you in the right direction, so that your growth plans are more likely to succeed. It will succeed because you are maintaining tighter control.
Remember, your company is an organization made up of six vital components: Administration, Operations/Production, Sales/Marketing, Customer Service, Human Resources and Management. Whether your company is a 1 person enterprise or employs hundreds of people, all companies are comprised of a minimum of these components.
The function of the business plan can be to provide a periodic check-up to assess each of the six components of your business. This assessment process enables you to identify areas of concern, brainstorm solutions and implement corrective actions that will steer your company in the right direction.
Business Plans are customized to serve a particular purpose.
Case Study – Finger Lakes Winery
We recently had a young family with children who wanted to build a family winery. In their case, the business plan served not only as their compass, but it served tangible functions that they needed. For example, the business plan listed roles and duties of each family member and employees, job descriptions and compensation. It listed the varieties of wine and and other food items they would be selling and broke down the costs of production, sales price and profit margins.
It spelled out the sales strategy, and what percentage would be sold wholesale versus retail.
Their plan included a SWORT Analysis and how they were going to maximize their elements in their favor, whiling minimizing their vulnerabilities:
It was important to the family that they build a reputable, family business that contributed to their local community, and eventually be passed on to the next generation.
Case Study – Rochester Woman-owned Entrepreneur
We have a client who wants to approach a prospective business person about becoming her business partner and help her grow the business to the next level.
She contacted us to prepare a proposal that she would submit to the prospective business partner. In this case, the business plan needs to showcase what her existing business has done since it opened, introduce the business owner by describing her achievements and results, introduce financial projections, business valuation and proposed financial buy-in. The plan has to have a “wow!” factor woven in, so that the presentation becomes an irresistible offer that cannot be refused!