What good is a business plan? I know my business.

As I tell my clients, not having a business plan is rather like going on vacation to Disney Land with no idea when you will go, how you will get there, how you will pay for it or where you will stay once you get there.  You might get there anyway, but you will likely spend much more money and waste a lot of time.  Hopefully you have already done your homework and decided on the vision of your business in the next three to five years.  Now to draw the map of how you will get there.

A business plan is not a static thing.  You may change your mind, update it or tweak it.  You might leave it a lone for a while and then come back to it every so often to make some changes.  The basic plan goes something like this:

I.  Company
A. Overview
B. History
C. Management Team
D. Locations and Facilities

II.  Products & Services
A. Products or Services
B. Competitors

III.  Target Market
A. Market Overview
B. Market Needs

IV.  Strategy & Implementation
A.  Marketing
B.  Milestones

V.  Financial Plan
A.   Sales Forecast
B.  Budget
C. Personnel Plan
D. Profit & Loss Statement.

You may decide not to include some of these items.  However, you should pay special attention to the description of your products or services and research your competitors.  You don’t have to list every single competitor, but you should have a general idea with whom you are competing for customers and what advantages you have over them.  Research your market, you may find that you want to target different customers than you originally thought (or than you’ve been targeting so far).

Marketing is a big part of your business plan, but you don’t have to develop a three year marketing strategy.   Things change too much year to year, or even month to month, for a really long term plan.  A one year plan is long enough to see if worked, but no so long that you won’t make use of new technology, markets and strategies.   You don’t have to spend a lot of money either, but develop a plan and stick with it long enough to determined its efficacy.  You may want to start with social media (its cheap!).  Whatever it is, plan it out.  You should also have some milestones.  You won’t complete everything all at once.  Break it into smaller bites, like eating an elephant one bite at a time, just don’t forget about them.

You may decide to leave the Financial Plan out of it.  It isn’t something I recommend, but if you aren’t comfortable enough with bookkeeping and guessing, or you don’t have a bookkeeper, it might be something to leave for later.  You should map out a general idea of what increases you want to see as a result of your marketing efforts and know your starting point.  You can always work on the financials later.

I know that’s a lot of information and a lot of work.  I didn’t say it would be easy, I just know it will be worth it.