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You have to have a well-thought-out vision before
you can begin drawing up your business plan.
Dear Small Biz Adviser
Where is the best place to start making a business plan?
Beginner
Dear Beginner:
The first place to begin, as crazy as it may sound, is in your head.
You should begin with a vision of what you want to do.
More specifically, what do you want to sell?
To whom do you see yourself selling the product or service? Do you
envision yourself selling locally, statewide, nationally or internationally?
How do you see yourself promoting and advertising the business?
Finally, what kind of enterprise do you envision?
In other words, do you see employees, a storefront, online presence
with a Web site, office and work site equipment, vehicles, and machinery?
You should have some clarity to your vision.
Does this mean that if you are proved wrong about the vision that
you are destined for doom? No! But you need to have an organized
focus if the business planning process is going to start smoothly.
OK, you went outside, paced around in the backyard,
and even starting talking to yourself in the dark. Have you got
a vision now? That's good. Let's proceed.
You now want to understand the reason to write
a business plan. People often mistakenly believe they develop a
business plan primarily to get a loan. It's true, a business plan
does help there.
But the foremost reason for a business plan
is to determine whether your idea, your vision, is feasible in its
marketability and financial risk. In other words, do conditions
exist that allow this business to be profitable?
Your next move is to a bookstore that has a
well-stocked business section. You will find scores of how-to books
on writing a business plan. Browse through them. Some are for any
type of business, but I prefer those that differentiate between
manufacturing, service and retail businesses, because each develops
its financial statements differently.
Once you find the right kind of business planning
book, read it from cover to cover. Too often, people are in a hurry
to start writing the business plan. They feel the need to get money
as soon as possible, lest someone beat them to their market. Know
this: You will have some form of competition, no matter what.
Do yourself a valuable favor and take the time
to read the book thoroughly. You will have a better grasp of your
business vision, know what to anticipate in writing your plan and
know how to prioritize your tasks.
For example, most business planning consultants,
yours truly included, say you should save writing the executive
summary until last. It may be at the front of the plan, but it summarizes
what is to be found in the body of the plan.
If you are still encouraged, it is now time
to decide if the plan will be developed from scratch, just like
those famous composition assignments in school, or if you want to
try your hand at a software application.
From this point forward, I now direct you to
my column
of May 30, 2000. It elaborates on most of the better-known business
planning software applications on the market today.
You are now ready to begin your journey.
Bankrate.com writers base their answers on our editorial
content and advice of financial professionals. We make no claims
or representations about the accuracy, timeliness or completeness
of such content, advice or the answers provided to you. Our content,
advice and answers are intended only to assist you with your financial
decisions. However, by its nature such information is broad in scope.
Your financial situation is unique, and our content, advice and
answers may not be appropriate for your situation. Accordingly,
we recommend that you get different opinions and seek the advice
of your accountant and other financial advisers before making any
final decisions or implementing any financial or investment strategy.
-- Posted: June 30, 2000
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