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Five Steps to a Business Plan

Written by: Casey Dawes

Article Overview: Many women business owners struggle through their first years of business without a business plan. There’s so much to do, they think. It’s hard enough just earning a profit. Who has time to write a business plan? You may be one of these people. You know you should write a business plan, but don’t know where to get started. You’ve tried some of the templates that are out there, but they just didn’t work for you. This may particularly be true if you don’t want to borrow money from a bank. TThis article shows you why you need a business plan and some simple steps to get past the resistance and write one!

Five Steps to a Business Plan

Many women business owners struggle through their first years of business without a business plan. There’s so much to do, they think. It’s hard enough just earning a profit. Who has time to write a business plan?

You may be one of these people. You know you should write a business plan, but don’t know where to get started. You’ve tried some of the templates that are out there, but they just didn’t work for you. This may particularly be true if you don’t want to borrow money from a bank.

Part of the reason that you don’t want to take the time to write a plan is because you don’t have a strong enough reason to do so. It’s really that simple. When you are a busy business owner, you tend to do the things that are right in front of you. I know, because I own my own business, too. What I plan to show you in this article is why you need a business plan and some simple steps to get past the resistance and write one.

Step One: Determine WHY you want a business plan.

Many business owners feel that they “should” have a business plan. Anything that is a “should” has little chance of getting completed. If you believe that your business could stand more structure, or if you aren’t clear on where you are going, but are working very hard to get there, a business plan will help you. If you want to apply for a loan at the bank or through the Small Business Administration, a business plan is a necessity. Take time right now to figure out why you need a business plan. Can’t figure it out? Then skip the rest of this article right now and come back when you can.

Step Two: Figure out how you think

Business plans, like many non-fiction books, can be developed one of two ways. Either you start your way from the big picture and work your way down to the details, or you start with the details and have the big picture emerge from there. Your preference is individual. If you are a top-down thinker, starting with the details will be impossible. If you are detail-oriented, having to come up with an executive summary of your business may stop you dead in your tracks. Once you have figured out how you process, do the next steps in whatever order makes sense.

Step Three: Gather the detail. (If you are a top-down person, go to Step Four and come back after you have finished that.)

Detail includes past results, financial statements and what you have done that works and what hasn’t. It also includes research into the competition. Make sure you have the information on the following list:

• Financials: What you have spent and received on your business over the last year. Detail is important here. You’ll need to break it out into business spending categories. If you aren’t sure about what categories to use, check your tax return.
• Products/Services: What are the products and services you offer to your customers? How much do you charge? How much do they cost to make? How many of them did you sell? How many do you need to sell to make a profit?
• Competition: Who is it? How do you differentiate yourself from them?
• Sales/Marketing: How are you planning to market and sell your products/services? How much will marketing/sales cost you? Who is your target market? Whar are the market trends in your particular business? If you have a marketing plan, you can just include it as part of your business plan.

Step Four: Sum it up. (If you are a top-down person, do this step before you do Step Three.)

Describe your business in a few short paragraphs. These paragraphs will help you see exactly what type of business you are in and how you plan to be successful. Include the keys to success in this section. Keys to success will be the indicators that tell you that you are on the right track. For example, if success for you is based on gross profit, put your key indicators in that format. “XYZ Company will gross $100,000 during its first five years of business.”

Step Five: Determine the gap.

Take a look at where you are now and where you want to be. There’s probably a gap between those two states of business being. For example, if you want to gross $100,000 during your first five years of business and you are currently in the red, you will need some strategies to close that gap. This is the last, and in many ways, the most important part of your business plan. Write down what you have to do and how you are going to do it as part of your plan.

There you have it! Five steps to help you craft your first business plan. Then all you need to do is keep the plan handy. If you refer to it often, using it as a guide to making your business decisions, you’ll find it a handy guide to success!

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Article Tags: big picture, business owner, business plan, business plans, first years, little chance, money, non fiction books, own business, preference, resistance, simple steps, small business administration, struggle, templates, thinker, two ways, women business owners



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Is A Business Plan A Waste Of Time? - According to various government statistics, up to 80% of businesses will fail within their first five years of operation. That number is staggering to me. At the same time, when I look at most business owners, most of them do not have a business plan for where they want to go. When you ask entrepreneurs why they don’t have a business plan, most of them will say something like: “it’s too much work”, “I’m not trying to raise money”, “it’s all in my head already”, or “my business changes too often for a business plan to be worthwhile.” Sound familiar? Did you write a business plan for your company when you first started? Are you planning on doing it for your new business idea?
Re: 4 Ways to Go From Employee to Entrepreneur - The situation that Wezi describes is more the norm than the exception. I have spoken to many "entrepreneurs-to-be" that have a desire to work for themselves but can't overcome the fear of making that critical leap. The truth of the matter is, if fear is preventing you from moving forward with your own business you need to overcome that fear first. To do this, try this exercise: 1. Write down as many detailed reasons why you are DISSATISFIED with remaining in your job until you retire. E.g., it won't let you achieve the lifestyle you desire; you are sick of commuting an hour each day; etc. 2. Write down in as much detail as possible your VISION of what your life will be like once you have your own business and you are fully engaged in it. Enjoy this step. 3. Create a list of the action steps you need to actually complete to get things rolling. What do you need to do first? Second? Third? Create a step by step plan. These three steps all work together to overcome any resistance you may feel towards making a major change in your career. If after these exercises, you are still too afraid, look at what you have written down. Chances are one of the three forces for change (dissatisfaction, vision, or first steps) are not yet strong enough to overcome your fear. Perhaps, once you really thought about it, things aren't really that bad in your current career, etc.... Hope this helps.
Starting A Business - Your are recieving some really good advice on the mental aspect of starting a business. I work with clients on a more technical level when starting a business, structure, licensing, taxes, business plan, intital steps, etc. Don't get me wrong, all entrepreneurs need both, motivation and technical support. They work hand in hand. My suggestion to you is to both mentally prepare yourself and began establishing goals. I use a method for business development, which has been very beneficial in the success of my clients, "PIE". Plan, Implement, and Execute (business plan). After identifying the processess which is needed to take, you must then follow through with the neccessary research to determine how to establish the business. Call your local City Clerks office to find out what you need to establish a business in your area. Find out what type of license will you need (if one is required), depending on the location of your business you may not need one. Additionally, what is the best structure for your business type, what are your tax requirments, how to establish business credit, what is required to obtain capital to start your business. These are the fundamental things you should know before starting a business.
Re: What is your biggest challenge? Today? - I've been dealing with the same dilemma. The bottom line is that I have too many projects going on at once. I can only let go of a few, but I can say no to new projects. The way I manage it is by keeping an outline of my overall business plan...of where I am headed in the long-term. I take a look at each project and focus on the ones that are most important to my long-term success. The only challenge I'm having with that now, is having the patience to build my business slowly. I wish it could be all done now, but I have to get comfortable with baby steps.
Re: Is A Business Plan A Waste Of Time? - A business plan is never a waste of time. A friend of mine was funded by the quality of his business plan. The banker looked at his business plan and concluded that he knows what he is doing.


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