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WRITING A BUSINESS PLAN

If You Plan to Market Your New Product Yourself, That Means Starting a Business. And Every New Venture Needs a Roadmap.

PART ONE

By Ken Tarlow

Developing a business plan is widely considered to be the most important thing you do before going into business. The process of putting the business plan together, including the thought that you put in before writing it, forces you to take an objective, critical, unemotional look at your entire business proposal. For a startup business, the plan is an assessment tool. As you work your way through all the points of the plan, you'll have to continually reaffirm the viability of your business idea. And as you grow, it will help you keep track of details you can no longer keep in your head.

The business plan is the "blueprint" or "roadmap" for your business. A thoroughly-researched and well-thought-out plan will clarify your goals, focus your energy, and help you gauge your progress. Your business plan will inevitably be changed once operations start. If nothing else, the original estimates are usually inaccurate. As a result, the business plan must be altered to take these changes into account. This may involve increasing sales prices, eliminating some expenses or rethinking your marketing strategy. You must have a systematic method for periodically (weekly, monthly) checking actual results against business plan estimates and making necessary adjustments.

A good business plan is also a tool for raising capital and is absolutely essential if you plan to seek money. To get a loan or attract investors, you'll need to present a cohesive picture of your business, the management team, why it will succeed and how you intend to repay the bank or investors. Your business plan will provide a logical means of determining your initial financing needs.

Keep in mind that your business plan will be the best form of communication between you and others (suppliers, investors, etc.). The plan should always include an Executive Summary. Most people who read business plans read the summary first and may never go beyond that. Make it a good one.

The following are the basic areas that I consider to be the major elements of a business plan. If you find other areas that you consider pertinent to your business, by all means include them if they contribute to clarity and understanding.

Every business plan will include:

* A Disclaimer on the first page

* An Executive Summary

* A Table of Contents

* A Company History and background (if it exists)

* How the money you wish to obtain will be used

* Products or Services

* Future plans

* The Potential Market

* The Immediate Market (the one you can reach right away)

* How the product will be made and its production capabilities

* Management (Key Personnel and their backgrounds)

* Potential Problems

* Risks

* Present Company Ownership

* Present finances of the operation

* Your Financial Plan (the pro forma)

* Appendix (backup data, studies, or tables which help describe your plan in detail) 

The depth of detail devoted to each heading is directly related to the explanation required for each heading. In other words, explain each heading in as much detail as necessary to make it understandable to others. But don't go into too much detail. Remember that the primary purpose of the business plan is to communicate with others and in particular to convince them that:

1. You are competent.

2. You understand your product thoroughly.

3. What you're trying to do is worthwhile from a business point of view.

4. The venture can be profitable.

In the next issue, we will look at each aspect of the business plan in further detail.

The above article was excerpted from Tarlow's MIND TO MONEY, a cassette tape/workbook package that can help you develop a new product from the idea stage to the marketplace. MIND TO MONEY may be ordered from the Dream Merchant at $59.95 plus $4.95 CA sales tax and$5 shipping and handling ($69.90 total). Send orders to the Dream Merchant, 2309 Torrance Blvd., Suite 104, Torrance, CA 90501.