Everyone has ideas
When they get into a hot car, they wish there was something that would help keep it cool. After a pot of water boils over, they dream of an invention that would prevent it. How many times have you seen a new product, or service, and realized that you had come up with the idea years earlier? Ideas are a dime a dozen, but planning is what it takes to make things happen. That’s why every entrepreneur needs to have a written business plan in place.
I can already hear some people out there coming up with excuses. “I don’t need to write down my plan; it’s all in my head.” Unfortunately, you can’t show your head to the bank when applying for a small business loan, or to help woo potential investors. You can’t tell your partners and employees to look in your head to see if they are meeting their targets. Most importantly, the plan you have in your head is probably unrealistic. It’s only natural to focus on the positives of a business without looking at the pitfalls. Taking the time to write out a plan will force you to look at your ideas critically and realistically. Very few businesses are successful from day one, and you need to be prepared for that. If you start with an overly optimistic goal you’ll quickly become disappointed, and could abandon a great idea that just needed more time to be nurtured.
Still, the idea of sitting down and writing out a business plan can seem overwhelming. While it may be tempting to hire an outside company to write the plan for you, this is not a good idea. Your business plan will be the bible of your company, representing your personal hopes and dreams. Hiring someone else to write it would be like hiring someone else to write your wedding vows. It might be easier, but it misses the point of the exercise.
A business plan is made up of four main sections: business description, a marketing plan, finances, and management. Under each of these headings you should apply a SWOT analysis. SWOT, one of those crazy acronyms that MBA’s love to throw around, stands for Strengths, Weaknesses, Opportunities, and Threats. You need to be brutally honest as you are writing this plan. Entrepreneurs are positive minded people, and sometimes they struggle with having to focus on negatives.
If you find your Weaknesses and Threats, analysis to be skimpy, you need to work on beefing them up. Even the greatest business models have downsides. Multi-million dollar corporations, like Microsoft and Wal-Mart, have extensive lists of weaknesses and threats. It’s unrealistic to think that you have none.
There are a number of books that can help you write a business plan. The Small Business Administration (SBA) also offers a step-by-step guide to writing good business plans. You can also call your local Chamber of Commerce or other executive associations to see if they offer and classes or services to help entrepreneurs.
Remember when I said that you shouldn’t have someone else write your business plan? That doesn’t mean that you can’t hire people to help you write your own. It’s the difference between paying someone to take a test for you, and hiring a tutor to empower you to do your best. A business consultant will bring their experience and wisdom to your project. They not only understand technical details, like how to write a plan, but offer perspective. Sometimes, you’ve been living with an idea for so long that you are unable to see its full potential. Silly Putty started off life as a failed scientific endeavor to create synthetic rubber. It took 20 years until someone realized that it had potential in the toy world. Your idea might have potential you haven’t even imagined.
No matter what type of business you have, or want to have, the first step is creating a solid business plan. Even the best plans may need to be adapted or changed over time, but at least a written business plan will give you a starting point. Anyone can have a dream, but an entrepreneur knows how to make them become reality.
