You've decided to write a business plan, and you're ready to get started. Congratulations. You've just greatly increased the chances that your business venture will succeed. But before you start drafting your plan, you need to--you guessed it--plan your draft.
One of the most important reasons to plan your plan is that you may be held accountable for the projections and proposals it contains. That's especially true if you use your plan to raise money to finance your company. Let's say you forecast opening four new locations in the second year of your retail operation. An investor may have a beef if, due to circumstances you could have foreseen, you only open two. A business plan can take on a life of its own, so thinking a little about what you want to include in your plan is no more than common prudence.
Second, as you'll soon learn if you haven't already, business plans can be complicated documents. As you draft your plan, you'll be making lots of decisions on serious matters, such as what strategy you'll pursue, as well as less important ones, like what color paper to print it on. Thinking about these decisions in advance is an important way to minimize the time you spend planning your business and maximize the time you spend generating income.
To sum up, planning your plan will help control your degree of accountability and reduce time-wasting indecision. To plan your plan, you'll first need to decide what your goals and objectives in business are. As part of that, you'll assess the business you've chosen to start, or are already running, to see what the chances are that it will actually achieve those ends. Finally, you'll take a look at common elements of most plans to get an idea of which ones you want to include and how each will be treated.
Determine Your Objectives
Close your eyes. Imagine that the date is five years from now. Where do you want to be? Will you be running a business that hasn't increased significantly in size? Will you command a rapidly growing empire? Will you have already cashed out and be relaxing on a beach somewhere, enjoying your hard-won gains?
Answering these questions is an important part of building a successful business plan. In fact, without knowing where you're going, it's not really possible to plan at all.
Now is a good time to free-associate a little bit--to let your mind roam, exploring every avenue that you'd like your business to go down. Try writing a personal essay on your business goals. It could take the form of a letter to yourself, written from five years in the future, describing all you have accomplished and how it came about.
As you read such a document, you may make a surprising discovery, such as that you don't really want to own a large, fast-growing enterprise but would be content with a stable small business. Even if you don't learn anything new, though, getting a firm handle on your goals and objectives is a big help in deciding how you'll plan your business.
Goals and Objectives Checklist
If you're having trouble deciding what your goals and objectives are, here are some questions to ask yourself:
- How determined am I to see this succeed?
- Am I willing to invest my own money and work long hours for no pay, sacrificing personal time and lifestyle, maybe for years?
- What's going to happen to me if this venture doesn't work out?
- If it does succeed, how many employees will this company eventually have?
- What will be its annual revenues in a year? Five years?
- What will be its market share in that time frame?
- Will it be a niche marketer, or will it sell a broad spectrum of good and services?
- What are my plans for geographic expansion? Local? National? Global?
- Am I going to be a hands-on manager, or will I delegate a large proportion of tasks to others?
- If I delegate, what sorts of tasks will I share? Sales? Technical? Others?
- How comfortable am I taking direction from others? Could I work with partners or investors who demand input into the company's management?
- Is it going to remain independent and privately owned, or will it eventually be acquired or go public?