What's The Plan?

Practical Tips and Strategies

Writing a business plan isn't necessarily sequential; for example, when you develop market strategies, you'll need to consider both the competition and your finances, so you may move from one section to another and back before you finish.

Each section of your plan should include goals and strategies. Helmick recommends setting a large, long-term goal, then breaking it into manageable chunks. "You may decide that in five years you want to be generating $2 million in revenue," she says. "Now start backing up. What's a realistic annual growth rate for your business? If it's 20 percent, then to be at $2 million in year five, you need to be at $1.6 million in year four, at $1.3 million in year three, at $1 million in year two and at $800,000 in year one. What do you have to do to reach those numbers? How many units do you have to sell and what do you have to do to sell them? Break that down into quarterly, monthly, weekly and even daily targets and task lists, and incorporate that type of planning into your business plan."

Business plans aren't written in stone, and even the best plan needs to change as circumstances do. Just be sure to think your changes through and see how a change in one area will affect the rest of the company. For example, if you change your product, will that affect packaging? If you shift your marketing strategy, do you need to adjust production to meet greater demand? How will either of these changes affect your financial situation?

Finally, Helmick advises, use your business plan to build value in your company. "Approach this process as though you're building a company you intend to sell, whether you are or not," she says. "Look for ways to increase the company's value, whether it's in hard assets, inventory, customer goodwill or intellectual property, then periodically assess what you've accomplished. You may never sell the business, but this technique helps you create a solid, viable company."

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This article was originally published in the March 2000 print edition of Entrepreneur with the headline: What's The Plan?.

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