People with a GPS (Global Positioning System) do not remember that this system was set up in 1978 for the military with dedicated satellites. Although it has evolved exponentially over the past 40 years and used by governments and industries around the world, it was a great use of satellites and easier communication.
Entrepreneurs have their own “GPS” to help find small business success – the business plan. But unlike its electronic counterparts, a business plan does not come with a pre-programmed route to “Easy Street.” It is up to every aspiring small business owner to collect and analyze information related to a small business idea. Only then can one determine how best to get this idea from point A to point B and beyond.
The prospect of preparing a business plan can seem quite daunting; it takes a lot of time. Most aspiring entrepreneurs quickly find exercise enjoyable and independent: the more they explore the opportunities and challenges of their idea, the more they want to know. They also realize that just as a poorly programmed GPS will lead to a loss, an ill-prepared business plan will doom their small business dreams.
Preparing a business plan has never been easier. There are many software tools and templates available to guide you through the different sections (e.g. market analysis, description, organization and management of the proposed business, customer base, financial projections, etc. .).
There is also room for creativity, especially since the business plan can be used to motivate banks and other potential investors to support your business. For this reason, I recommend “enhancing” a business plan with features like PowerPoint slides, relevant charts and graphs, and even a website or video.
Whether you present your plan in person or via email, readers’ attention spans are short and you need to get key information across quickly. When used as part of a loan presentation, it will read a little differently than it will as an internal document primarily intended for the owner and managers. As a loan document, it will contain a number of identical elements but will exclude many management analyzes.
A business plan is a work in progress. Indeed, a small business must always evolve and adapt in response to national and local economic changes, new technologies and changes in consumer preferences.
I suggest the following timeline for business plan revisions / updates:
- Annually. A basic assessment. Look for changes in your target market, areas that may require re-prioritization, and ways to improve the efficiency of your operations.
- Every 3-5 years. A more comprehensive review where the goal is significant sales or revenue growth.
Finally, after a major change in your industry or some other critical event. Examples include a new regulatory requirement, a natural disaster or act of terrorism, the entry of a new major competitor, etc.
There are a number of sources for obtaining a business plan template. The one I recommend is on SCORE.org which has a flexible schedule that you can use or remove items as appropriate. It can be downloaded and adapted to your needs.
If you need business advice, mentorship, or other financial matters, you can contact me directly if you are in this region, or contact SCORE.org to find a SCORE member closest to you.
David Inskeep is a retired commercial lender and can be contacted at firstname.lastname@example.org.