—Neil F. Anderson, Founder & President, The Courage Group, Inc.
In an up, down, or whatever economy, companies will continue to let people go. Job security has gone long by the wayside. Many of these affected employees (especially baby-boomers) are deciding to start their own business. Now choosing to control their own time, income and destiny. Now choosing to own the corporate ladder vs. trying to climb it again.
However, most new start-ups will fail within three years. One of the biggest reasons; no business plan. Many thinking that writing a business plan was not necessary. A waste of time, since they were not trying to raise money from anyone.
Want to dramatically improve your chances of business survival and growth, and avoid the start-up graveyard? Write a business plan.
A Root Canal
A big mistake-don’t equate writing a business plan as the equivalent of getting a root canal. The smart, successful entrepreneurs take a different approach, a different mindset towards writing a business plan. They don’t look at it as a painful experience. They look at is as an opportunity. An opportunity to survive, grow and prosper. Increasing their chances of getting it right the first time. More importantly, increasing their chances of never having to go back and work for someone else again.
Business Plan Defined
Simply put, a business plan is a written description of what you are going to do and how you are going to do it. It will force you to completely think about every aspect of the new business, especially marketing and sales. Most new entrepreneurs come in with limited, narrow skill sets (including this one) gained from corporate America. But as a new business owner, you need to know a little about everything, all functions of the business. Especially during the early years, when most entrepreneurs are the chief, cook and bottle washers of the business.
WHY? Top 10 Reasons
- You have never started your own business before
- You don’t want to lose your life savings
- You don’t know, understand marketing and sales
- You don’t know, understand numbers
- You don’t know, understand intellectual property issues
- You don’t know, understand technology
- You need to raise money from bankers/investors
- You don’t want to fail the first time out
- You want to form strategic alliances with bigger companies
- See #1 again
Now that you know what a business plan is and why it’s important. What needs to be in it. Here are the mandatory, 16 sections that are included in a well thought-out, credible, and persuasive business plan. These are also must have sections for bankers/investors.
- Executive Summary
- Source/uses of funds
- Company objectives
- Keys to success
- Company summary
- Service/Product description
- Consultants to planning process
- Marketing analysis
- Illustrative (show and tell)
In part 2, I will identify the two most important parts of your business plan, when it is the best time and worst time to write your business plan, and give you helpful tips for successfully raising money from bankers or investors.