In their book Write Your Business Plan, the staff of Entrepreneur Media offer an in-depth understanding of what’s essential to any business plan, what’s appropriate for your venture, and what it takes to ensure success. In this edited excerpt, the authors help you decide what your goals and objectives for your new business are before you ever start writing your business plan.
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 draft your plan, you need to focus on several areas from conceptual to “concrete.” One of the most important reasons to plan your plan is that you're accountable for the projections and proposals it contains. That’s especially true if you use your plan to raise money to finance your company.
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 and to maximize the time you spend generating income.
Ready to get started?
Close your eyes. Imagine that it’s five years from now. Where do you want to be? What will the business look like? 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?
Now's a good time to free-associate a little bit—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've 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, getting a firm handle on your goals and objectives is a big help in deciding how you’ll plan your business.
If you’re having trouble deciding what your goals and objectives are, here are some questions to ask yourself:
1. How determined am I to see this venture succeed?
2. Am I willing to invest my own money and to work long hours for no pay, sacrificing personal time and lifestyle, maybe for years?
3. What’s going to happen to me if this venture doesn’t work?
4. If it does succeed, how many employees will this company eventually have?
5. What will be its annual sales in a year? Five years?
6. What will be its market share in that time frame?
7. Will it be a niche marketer, or will it sell a broad spectrum of goods and services?
8. What are the plans for geographic expansion? Local? National? Global?
9. Am I going to be a hands-on manager, or will I delegate a large proportion of tasks to others?
10. If I delegate, what sorts of tasks will I share? Sales? Technical? Others?
11. How comfortable am I taking direction from others? Could I work with partners or investors who demand input into the company’s management?
12. Is this venture going to remain independent and privately owned, or will it eventually be acquired or go public?
Your plan may look beautiful, but without a solid understanding of your own intentions in business, it's likely to lack coherence and, ultimately, prove ineffective. Let’s say in one section you describe a mushrooming enterprise on a fast-growth track, then elsewhere endorse a strategy of slow and steady expansion. Any business-plan reader worth his or her salt is going to be bothered by inconsistencies like these. They suggest that you haven’t thought through your intentions. Avoid inconsistency by deciding in advance what your goals and objectives will be and sticking with them.