Recently I attended a business plan writing workshop hosted by the Champlain Valley chapter of SCORE (http://score284.org/) and Merchants Bank, which made me think this is as good a time as any to talk about the dreaded subject of business planning. I’m not going to tackle how to write one in this article. This is more about the whys and wherefores of doing it at all.
I call the subject “dreaded” because those of us who are not business people going into this adventure are more than a little intimidated by the task. I know it felt like a huge, daunting term paper for me, and I have plenty of writing experience. What was hard for me, I think, was the nagging awareness that writing a business plan could force me to admit all the things that I did not yet know enough about, which could, in turn, take the wind out of my sails. Gross margin, huh? Market share, whaaa? Although it did in truth make me feel mighty uninformed – if not downright stupid sometimes – writing the thing did not take the wind out of my sails. Far from it. It gave me focus and confidence (once it was all done), and a roadmap with which to sail the boat.
So what is the reason for doing it at all? There will be times when you absolutely need a business plan, such as if you are applying for a loan, or if you are seeking investors. For those purposes, you will want the best, air tight plan you can come up with. But even if you are seeking neither loans nor investors, the best reason of all to write one is to allow you to think through your business idea thoroughly and solve the problems that you will inevitably see as you do your research.
I did not write a business plan before we started. In fact, I didn’t start it until we were a good six months into the business. And it probably took me another six months to write. Before you are alarmed by that, bear in mind that with two kids and another job on top of the business, I could only steal a few hours every couple of weeks to do it. I would guess that it took me about 30-40 hours of my time to complete. It will take others considerably longer, and still others a fraction of that time.
Some will tell you that you really should write one before you do anything concrete related to the business. That is a good rule that we did not follow. For us, because we started so small with very little money out-of-pocket to get us going, it worked just fine for us to wait. For one thing, waiting gave us a little bit of real world sales data on which to base our projections. For another, we had a better sense of what we needed to do to grow, which gave the plan more purpose. If you will be sinking some real funds into your business right from the get-go, I recommend you follow the wise advice and do the homework before you get started.
Let me digress here for a minute to say that, in my opinion, you do not need to spend money on a special business planning software package. I did, and ultimately, I did not use that software to write the plan. There are a number of free options you should take advantage of. SCORE, for example, has a free template you can use to build your plan (http://www.score.org/business_toolbox.html). I also discovered, after wrestling for months with one particularly user-UNfriendly software program, that Quickbooks has a built in business plan tool that allows you to import your actual financial data to build your financial models. Hellooooo. Much easier.
For me, one of the best resources for writing the plan was to review other sample plans. There are numerous sample plans available for free on the internet. For example, entrepreneur.com has a collection of 50 sample business plans to review free on their website (http://www.entrepreneur.com/businessplan/a-z/).
Definitely look for the SCORE chapter near you (www.score.org) and watch for one of their inexpensive seminars. Although it really just gives the broad strokes of the basic elements that need to be included, it will make the process more accessible. And get yourself a SCORE counselor to help you as you slog through the process. Send them each section as you have a “finished” draft for their comment. Their services are free. Can’t beat that.
If you want more of an in-depth course in business plan writing, look for a continuing education class through a high school or local college. In the Burlington area, the Women’s Small Business Program offers a 15 week course on how to plan and start a business that results in a completely written business plan by the end of the course (www.wsbp.org). It is not cheap, but they have financial aid available if you qualify. I know one successful business owner in Burlington who swears by this course.
You can always hire a consultant to write your plan for you. However, it would be my advice to go through the process yourself first, and if you feel your finished product needs more work, hire the consultant to hone it for you. Sure, it would be great to have a professionally written plan, but if you ask me, the most valuable part about having a business plan is the education you got while writing it.