I’ve been reading alot about the different aspects of a business plan, especially the marketing side. It is evident that restraint is needed when forming a business plan as one could probably make a full time job out of writing and revising a business plan for a small business. I am wondering how many of you have a business plan, and what is it like? Formal, on paper? Written on a cocktail napkin? Do you have a marketing plan in your business plan, and if so how did you do your research? Does your company have mission statements and do employees know them by heart?
I think that most small business owners should write at least a beginning of a business plan. Obviously you need to get in the pool before studying the fine points of various swimming strokes, but it’s not bad to know the motions of the dog paddle. How did everybody start out? Did anyone really sit down and decide what and how they were going to do it?
Replies
when i got started in the mid-70's i went to a lot of seminars.. and i wrote a business plan... but reality seemed to make a mockery of it...and my peers weren't running businesses... they were building things not-for-profit....
then the boom - boom '80's meant you didn't need a business plan.. but all things come to an end..
luckily my experience of living thru the nixon recession of the 70's.. and the carter depression of the late '70's prepared me for survival in the late 80's & early 90's...
i finally got tired of listening to a lot of people (competition) say you couldn't do this and you couldn't do that.. and made up my mind to turn my hobby into a business..so that became my model... making my Building Company into a business with me as my main employee..
marketing is definitely a major part of being a real business.. but it is surprising how low-key marketing can really be and still be very effective..
do i have a business plan ? sort of...but it is still in a state of flux.. the main thing now is that i live a business plan....
boy.. i sure wish i knew 10 years ago what i know now... this can not only be fun.. it can also be profitable.....hooo----hah
Mike Smith Rhode Island : Design / Build / Repair / Restore
Jon,
I did a business plan after I had been in business for about 6 months and am glad I did. It forced me to think out all of the areas and realize what I needed to make. I did mine in a typed version. No one has ever seen it nor do I update it but would recomend doing one just for self awareness of all the issues of being in business profitably. Just my thought. DanT
I had to write one before starting my prior business. Required if you're gonna approach the banks and Venture Capitalists. Done properly, it forces you to think about things in a structured way that you would likely have ignored or glossed over. Took me between 200 and 400 hours to prepare, but it worked for me. If they are done *improperly*, they'll just reinforce misconceptions. I'm thinking of the ones in the computer industry that would estimate revenue by writing, "There are 46 million computers today. If we sell to just 1/10th of 1 percent of them, and surely we can do that, we'll gross X bazillion dollars."
But writing a plan is only a small part of its value. The real value comes from having someone qualified review it. They'll be the one(s) to find the flaws in the logic or numbers that will help make the business stronger. Gotta tell you that process is rough on the ol' ego, but it's better to spot flaws in a plan before it is executed than during or after.
'Course, the same would apply to plans for building, I guess.
Jon - I write business plans for other companies for a living. If I was in a sales mode I would say that you absolutely need one. The truth of the matter is that you probably don't need one. As some of the other respondents have indicated, there are some real benefits as a communication tool - esp., if you need capital financing or investor involvement. However, most "small" businesses do a pretty good job without, as they tend to rely on bank financing from a bank that they have a relationship with. Also, many small businesses really have a vision of remaining relatively small, and growing from their own resources (bootstrapping, or growing out of cash flow), within their (local) market.
If you have a vision or see the opportunity to grow the size and value of your business by acquisition of / merger with other businesses, investing in new technologies, creating a new product and bringing it to market, or by expanding into other market(s) segments by investing in marketing and sales resources, then you should probably start with a brief strategic and business plan. Once you get started, you'll quickly find the amount of detail and information that will assist you in your business growth efforts.
If you are looking for relatively inexpensive information regarding business plans, you might try looking on the INC. Magazine website, as they tend to publish a lot of articles about small high growth businesses and (used to at least) publish/sell some "how to" books that were pretty comprehensive as well as very well written.