November 1, 2003 Issue #18


IN THIS ISSUE

  • ENTREPRENEURSHIP: Do you really need a business plan?
  • 3 simple things to do for your business this month
  • Good link: The Foundation Center
  • Write to us / pass it along / article reprints

ENTREPRENEURSHIP: Do you really need a business plan?

This is a reprint of an article published in the Business Odyssey Chronicle one year ago.

Of course you need a business plan! Most entrepreneurs do have some sort of business plan - usually locked away inside of their own heads. The problem with that is the plan is not available when you need it the most.

When business gets challenging or you get off track, your mind is working hard on coping and you, most likely, cannot take the time to ponder what you had intended. As the old saying goes, "When you are up to your $%# in alligators, it's hard to remember that the objective is to drain the swamp." A written business plan keeps your goals clear and out in front of you where you can use them.

There are two primary purposes for a business plan: 1.) to obtain financing, and 2.) to guide the development of your business.

Reason #1 is what prompts most people to write a plan but reason #2 is just as important. When you have written goals, written budgets, written marketing strategies and written financial projections, you can measure your actual progress toward achieving your goals. This keeps you on track and gives a realistic picture of your progress.

Sometimes our perceptions can be clouded. I have worked with a number of entrepreneurs who thought that they had hit a slump and were doing terribly. When they looked at their actual progress against what they had planned, the picture actually looked pretty good. On the other hand, some think they are doing great when actual accomplishments as compared to the plan do not support that feeling. When you are running a business, it is important to know the truth.

There are two basic kinds of plan - a strategic plan (a term often misused) and a business plan.

A strategic plan focuses on broad, longer term objectives. The written document is often very short - just a few pages. In developing a strategic plan, it is important to have information about long-term trends in your industry, your market and in the technology you use. The strategic plan usually covers three or more years. It should be reviewed annually and rewritten at least once very few years to accommodate changing trends.

A business plan is a longer document but usually covers a shorter time span - usually one to three years. It contains specific goals which must be met in order to achieve the strategic plan. It also contains all of the details which are needed to support the plan and measure progress. This includes a detailed marketing plan, financial projections, staff planning, capital plans, operational and administrative plans, and what ever else is relevant to your particular business.

Your business plan should also include the data and research that supports the assumptions that you have used in making your projections. If you are using the business plan to secure financing, you will also need to include the credentials and experience of the management team.

Successful, well-organized businesses use the business plan to track progress on a regular basis - either monthly or quarterly and revise it annually.

You can hire a consultant to write your plan for you. Be forewarned, you will still have to do the thinking behind the plan and set your own goals. Hiring a good consultant with experience in writing business plans will usually cost $1500 and up depending on the complexity of the project. Some consultants will "coach" you or guide you in developing your own plan, minimizing the expense. Business Odyssey offers both approaches.

Lots of entrepreneurs follow the do-it-yourself approach. There are many books on the market to help. Adams Streetwise Complete Business Plan by Bob Adams provides a detailed, step-by-step process for creating your own business plan including sample verbiage and financial statements. This is the best book I have seen on the subject. Another very good book is The McGraw-Hill Guide to Writing a High-Impact Business Plan by James B. Arkebauer. Clear and easy to follow, this book is written especially for the novice and anyone who finds the task of writing a plan distasteful but necessary. Both books are available at https://www.businessodyssey.com/businessinformation.html

A good intermediate step - between doing it yourself and hiring a consultant - is to find a workshop. Business Odyssey offers a seven week program which will provide you with the support you need to complete the task. You will actually write your business plan during the workshop. The next workshop is scheduled to begin on February 23, 2004. Visit https://www.businessodyssey.com/training.html for details.


3 simple things to do for your business this month

1. Start to get your tax records in order. If you have a good bookkeeping system that is up to date, this should be a snap. If you have gotten behind, this is a good time to bring your records current and save yourself some of the agony of April deadlines.

2. If you haven't already done so, purchase your 2004 calendar and planner pages. Don't forget your desk calendar. If you are totally electronic, be sure that your software is up-to-date and all of the data has back up.

3. Schedule time for a year-end review. December or January is a good time to do this so schedule time now. An annual review is most effective if you can get away from your workplace for a half a day or more to look at last year's goals and assess how well you have met them. This is also the time to set new goals for the coming year.


Good link: The Foundation Center

Everyone who has a business looks for money for various reasons - education, expansion, research, etc. The Foundation Center at www.fdncenter.org provides a wealth of information for any person or organization looking for funding including small businesses.

The Foundation Center is actually a network of organizations located across the country. The web site links all of these centers together in a highly informative and well-organized web site.

At the site you will find a ton of information to get you started on your search. There is access to both classroom and online training. Courses cover a variety of topics - searching for grant money, how to apply for grants, etc. - on both basic and advanced levels. You will also find worksheets to help get you started. Many links to outside resources, both private and government are provided.

One of the most useful tools on the site is access to the Foundation Directory. This is a fee based service but, at only $9.95 for a month and discounted package rates for 3 months or more, it is almost a no-brainer. Payment of the fee gives you access to the Foundation Center's extensive database of grants and grantmaking organizations. Here you will find detailed information about grants that might be suitable for your needs.


Write to us; pass it along; reprint articles

If you have questions, comments or an idea for an article you would like to see in The Chronicle, please drop us a line at info@businessodyssey.com.

Please pass this newsletter along to anyone you think might find it of interest. If you do, be sure to forward it in its entirety and include the copyright notice.

To use an article in your own publication, just send me an e-mail telling me which article you want to use. I will e-mail you the complete article with an information block which MUST be included.


Copyright 2003 Kathleen Thompson ~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~

Business Odyssey

Cleveland, Ohio

http:/www.businessodyssey.com