Writing an Effective Business Plan For Your Small Business

Plans are Useless; Planning is Indispensable

“Plans are useless; planning is indispensable,” according to Dwight D. Eisenhower, then Commander of the Allied Forces in Europe during WWII. Now, you may be in total agreement with the first part of that statement, but you are really not convinced of the truth of the second part.

At this point, you may be tempted to skip writing a business plan altogether, viewing it as an unnecessary exercise in jumping-through-the-hoops, suggested by some old business professor who probably never held down a “real” job anyway. Maybe it’s okay as an assignment for an MBA class, but it would be just too confining and irrelevant for today’s fast-paced business environment. Anyway, you’re ready! You’ve thought about this business venture for a long time and talked it over with friends and everybody agrees it’s a great idea. Best to strike while the iron is hot!

Press for Success

Far be it from me to dampen your enthusiasm, but you should give yourself every opportunity for success. That’s what the planning part of the process of creating your business plan will do. By the time you have pressed your way through it, you will not merely have some neatly arranged document to keep on file, you will have a working tool that addresses the essential factors that influence your future.

Besides, your friends may be 100% behind you in your new venture, but, in case you are hoping to involve others who have actual money to invest, you may need to be able to make a convincing case. Wouldn’t it be nice to have anticipated possible questions and be ready with plausible answers? If you are risking your own money, that is perhaps even a stronger reason to do some indispensable planning.

Easy Writer

If you are one who is intimidated by the blank page, never fear! There are several good software packages that will guide you through the process, such as Business Plan Pro Complete from PaloAltoSoftware. Business Plan Pro Complete walks you through the entire planning process and generates a complete, professional and ready to distribute plan with a proven formula for success. The planning wizard makes it a snap to get started since you simply answer yes or no questions to create your custom business plan framework. Bplans.com offers free business plan samples and how-to articles as well as a wealth of other information. It is definitely worth taking the time to checkout. Microsoft Office Online Templates also has a variety of free templates to use with their products. The wizard indicates the information you need and you fill it in as you go.

You may find that the easiest part is the actual writing of the plan. The real work comes in the data-gathering, which may take you a hundred hours or more, depending on what you already know or have researched. If your new venture is in an area where you’ve been working, you may already know about your customers, your suppliers, your marketing plan, your organizational structure, your financial and cash flow needs, equipment, inventory, and so on. If you know all of these except for Marketing, say, then this is where you will need to invest some time and effort. You can find a wealth of information by utilizing the traditional data sources such as chambers of commerce, major cities’ websites, trade associations, the US Census Bureau, trade journals, magazine and online articles and advertising, etc. Performing keyword searches on Google, or Ask will bring up websites to check out. Following are some places to start:

  • James J. Hill Reference Library (jjhill.org): One of the nation’s premier business libraries to bring you FREE and affordably priced tools and resources you can use to create a better business plan based on relevant and credible data.
  • U.S. Census Bureau (census.gov): A source for a variety of useful statistics, especially the Economic Census that comes out every 5 years.
  • American Demographics (adage.com/americandemographics): Just as the title suggests, numerous free reports about consumer demographics in the U.S. nationally and by statistical area.
  • Internet Public Library – The Census Data and Demographics (ipl.org)/: An especially useful site that has links to information about countries other than the U.S.
  • Corporate Information (corporateinformation.com): Features information summaries on over 350,000 companies in the U.S. and abroad for competitive analysis.

You can find a variety of companies online to help you with your market research. For example: Sundale Research’s (sundaleresearch.com) primary goal is to provide new and mature businesses with objective, accurate industry data and market analysis on a wide range of topics. Their market research is intended to save you time and money while keeping up with industry trends.

But your idea may be so new that you may also need to talk to potential customers, host some focus groups, talk to an ad agency, or maybe even make a prototype and float it past some people. Be prepared to spend the time. Remember, it’s not about the Plan but the Planning.

Build It on Paper First

Whether you decide to use business plan writing software or to just follow this guide and create your plan with your word processor, here are the sections of a good plan and the questions that need to be addressed:

  • Cover Page – Show the name of the company, your name, and the date.
  • Introduction – What is the name and address of the business? Who are the principals, their titles, and their addresses? What is the nature or purpose of the business? What is your launch date? How much start-up and/or operating capital is needed?
  • Executive Summary – One to three pages that summarize all the information to follow; come back and write this last.
  • Industry Analysis – How does your product or service compare with what is currently on the market? What is the trend in the overall industry? What have been the total sales in this industry over the previous 3 to 5 years? What new products or technologies have had the biggest impact on this industry recently? What is the future outlook for these and what trends are emerging? Who are the competitors, where are they located, and how are they doing? What advantage do you offer over them? Who is buying this product or service now? Describe the typical customer for this product or service. Are there emerging markets or market segments? Where does this product or service currently perform best? Possible Data Sources: trade associations; trade journals; attorneys & accountants dealing with the industry; industry salespeople; state business websites; focus groups.
  • Description – What product(s) or service(s) are you offering specifically? Are any patents, copyrights, or trademarks needed? Have they been acquired/filed? What is the size of your business? Where will it be located? Will this require purchasing or building a facility? Will this require leasing a facility? At what cost? Has a lease been negotiated? What personnel will you need? Where will you find suitable employees? What equipment do you need? Will it be purchased or leased? What are the qualifications of your principals? How do their backgrounds promote the success of this venture? Why do they think this will be a successful venture? Possible Data Sources: local Chamber of Commerce; community colleges & local universities; local employee leasing company; real estate agents; US Patent & Trademark Office; US Copyright Office.
  • Production Operation – If a product must be manufactured, what is the process? Will the work be done on-site or subcontracted? Who are the subcontractor(s)? If on-site, what space, equipment, machinery, production employees are needed? What suppliers are needed? Who are they? How will quality be assured? What is the anticipated production output? What established credit lines do you have? Possible Data Sources: local Chamber of Commerce; yellow pages; trade associations.
  • Service Operation – If a service is offered, describe it. Will the work be done by company personnel or subcontracted? Who are the subcontractor(s)? If on-site or in cyberspace, what employee qualifications, equipment, and technologies are needed? How will quality be assured? What performance levels are anticipated per employee? Possible Data Sources: local Chamber of Commerce; yellow pages; trade associations.
  • Marketing – How is the product or service priced? How will it be distributed? How will it be promoted? Will it be promoted by the venture or an outside agency? What agency? How have you determined what amount to set aside for marketing? How have you determined product or service forecasts? Possible Data Sources: on-line searches; Amazon; local outlets; trade journals; industry attorneys & accountants; salespeople.
  • Organization
  • How is the business structured? Who are the principals and the principal shareholders? What authority does each principal have in the venture? What are management’s qualifications? What is the job description for each position? What does the organizational chart look like? Possible Data Sources: on-line templates for job descriptions & organizational chart.
  • Risk Assessment – What weaknesses are inherent in this venture? What vulnerabilities face this type of venture? What impact will these have? What new technologies may affect this venture over the next 1 to 3 years? What contingency plans are in place? What level of liability insurance is required? What does it cost? Who is the carrier? Possible Data Sources: trade associations; trade journals; Service Corps of Retired Executives (SCORE); industry salespeople; customers; focus groups.
  • Financial Plan – What is the anticipated income? What are the cash flow projections? What is the anticipated budget over the next 3 years? What is the break even point? When is it anticipated to be met? What funding is needed and where will it come from? What funding is currently available? What collateral is available? What is the net worth of the principals, if applicable? Possible Data Sources: accountant; accounting software; Small Business Administration; Small Business Development Center; SCORE; banks; venture capitalists.
  • Appendix – Resumes of principals/management; letters of recommendation from current business associates/customers/suppliers; marketing research data; demographic data; leases or contracts in place or as promised; business licenses; price lists from suppliers; trade or industry articles or data; floor plans; information on subcontractors; liability insurance policies.

Impress for Success – Now you have to admit, this is going to make an impressive package! Put it in a binder and you have built something to be proud of – the first of your many business accomplishments. Your potential investors will appreciate the depth of your analysis, but this tool will prove helpful in describing your venture to your employees, customers, and suppliers, as well. After you have been up and running for a few months, you will find that the planning that you have done will sensitize your inner “business compass” and allow you to flexibly adjust to contingencies. And that is indispensable!

In Summary

Planning out your business on paper first gives you long-term benefits with potential investors, employees, vendors, and suppliers. The business plan becomes your roadmap to success, with pertinent data that shapes the course of your business start-up and lets you adjust your journey as contingencies arise. Business planning templates are readily available and data sources abound at your fingertips. You will achieve a solid understanding of your business as you work through each section of your plan.

IMPress Action Checklist:

Below is a list of the steps that will help you put together your business plan. Check off each step as you complete it to keep track of your progress.

  1. Purchase business plan software or download a template
  2. Read over the business plan sections to decide what data you have, what data you need
  3. Gather data via the internet, phone interviews, print material
  4. Fill in the plan’s sections
  5. Write the Executive Summary
  6. Print and Bind Your Plan

What is Useful About Small Business Accounting

Most of the difficulties of a company come from poor management or accounting. Paradoxically, it is to this area that entrepreneurs provide the least effort. Indeed, entrepreneurs who lack training in business management prefer to spend their time on more exciting activities: selling, customer care, communication, products (which is understandable). That is why we suggest a few tips to follow for a successful small business accounting.

The key to Small business accounting does not only have to do with numbers

I put this point first, since it is most important. Accounting is not an end in itself but a tool.

It is true that most of it has to do with keeping track of what comes in and what goes out of the business. However, if you look closer at the information small business accounting gives you, you should be able to see trends in sales and expenses for example. When you focus on the long term trends, accounting becomes more useful and interesting. It tells you what happens every day, it highlights the problems, but it can also help you to solve those problems. You can make small business accounting if you only changed the way you look at it.

Routine practices for a regular and consistent small business accounting

The secret is to get used to performing accounting tasks and making them part of your daily or weekly routine. For instance, you may see that it makes it easier to choose a day during the week to perform a task. You can write checks and make deposits on Mondays. You can also decide to call your debtors on Tuesday. By doing this, you will be able to keep an eye on your finances without feeling like you are doing it.

Examples of small business accounting tasks to perform regularly:

Verify what your fixed costs will be for that month and anticipate for the following. Pay attention to what you spend this and the last month. Make sure you verify all credit card payments. Keep track of accounts receivables. Remember to send the invoices to the customers. Ask your accountant to verify the work you do. Keep track of cash flow trends, etc.

Social Media, Facebook, Twitter – Does Any Of This Really Work For Marketing Your Fitness Business?

Every man and his dog seems to be espousing the virtues of social media for marketing a fitness business nowadays.

They tell you that social media is the next ‘big thing’ and that if you’re not updating, tweeting or sharing something with the world about yourself or your fitness business in at least one of the many social media networks, then you’re missing out big style.

They tell you that social media is THE absolute best way to connect with the largest number of people who may be interested in taking you up on one or more of your fitness business services.

And, you know, I’m not going to disagree with them. Not one little bit.

Social media definitely isn’t the next big thing though. There’s nothing ‘next’ about it.

It’s THE big thing, right here, right now.

It’s important to every element of developing a know, like and trust strategy that, ultimately, guarantees and assures the success of your fitness business over time and yes, failing to utilise social media is like taking on Tim Goodwin in the World archery championships with a blindfold on and one arm tied behind your back.

Not much chance of beating Tim anyway as he’s world ranked but with those extra handicaps you’re completely out of the game, right?

Same if you don’t get social media savvy.

You need to use it. Period.

But HOW you use it, well that’s the thing isn’t it?

I know that many people love the old Tweeting and that many others absolutely love their facebook status updates and even their group pages but I’ve gotta tell you, to me both those platforms are merely message portals to do something far, far more important (and lucrative) than most fitness professionals are doing.

Let me explain.

If you’ve been online for a while you’ll know that one of the buzzwords in marketing is ‘Tribe’. Everyone’s always talking about ‘building your tribe’, aren’t they?

But what do they really mean?

Seems to me like most people are just using new language to talk about old stuff. When they say tribe, they’re really talking about ‘list building’ most of the time and think only about adding numbers to lists.

I’m not knocking that, list building is a vital part of growing your business, especially online, but if that’s what people are talking about, then why use the word tribe?

Well, if you’ve been around me very much, you’ll know that I’m very interested in etymology, the study of words and their meanings, so when someone starts randomly using a word around me, I like to understand what they really mean so, even though it’s kind of obvious, I looked up the word ‘tribe’ to see what the dictionary had to say about it.

TRIBE:

a class or set of persons, esp. one with strong commontraits or interests.

a group of people, often of related families, who live together, sharing the same language, culture and history, especially those who do not live in towns or cities

any aggregate of people united by ties of descent from a common ancestor, community of customs and traditions,adherence to the same leaders, etc.

When looked at it from definitions of what a tribe really is, very little of what goes on in most of the popular social media platforms is truly tribal, is it?

Few people are collected together for a common cause, adhering to similar traditions or sharing similar language are they?

And the more I thought about it, the more sites like facebook and Twitter seemed to me to be a kind of ‘cyber city’ with people to-ing and fro-ing, taking a few minutes here and there for small talk and (mostly) meaningless banter before moving on to their next visit with someone else.

Nothing wrong with that, of course, but, to me at least, it seemed to be the complete antithesis of what a tribe was supposed to be about.

I mean, be honest, when YOU think of a tribe, what do you think of? A group of closely connected people usually living in isolation or semi isolation in their own little village, right?

They have their own language, customs, rituals and they have very rich social connections that our modern social media can’t even begin to touch on.

That’s why I’m not huge on Facebook, it de-personalises and distracts members of the tribe I’m trying to build.

I mean, think on it, when you’re in FB and you see those little red flags come up saying that you someone wrote on your wall or inboxed you or tagged you in a picture, you can’t help but stop what you’re reading or popping out of the thread you’re responding to to find out who it was and what they had to say, can you?

It’s just like a city! Full of noise, distractions, sights, sounds and… crap!

And just like in a city, people don’t connect. Not REALLY.

Oh, they may nod, smile, observe the common courtesies but there’s no connection, is there? There’s not much in most social media either.

People are proud of the number of ‘friends’ they have following them but they’re not really friends are they? Not most of them, at least. If you’re at all unsure about that then send out a status update and ask to borrow £5 and see how many of your friends will pop that into paypal for you…

So, where am I heading with my mad ramble?

Well, it’s simple and obvious really.

If FB and Twitter are ‘cities’ and cities are not conducive to building a truly connected tribe then the only thing that makes sense is to give your tribe a community of its own. A place where they all share a common aim, where they all speak the same language, where they’re all connected by a feeling of belonging to something bigger than themselves.

They need a VILLAGE!

PTSA is a village. it’s only small with some 600 members from the fitness profession and actually, only about 50 are true regular contributors but there’s a connection, a common aim (to be great coaches) a common language (KCA, IPC etc) and definitely a feeling of connectedness.

Do you think this would have happened with FB or Twitter?

My other ‘village’ has almost 5200 members right now, most of whom are connected through my Elimination diet, Magic Hundred Program or one of my online challenges that I run regularly throughout the year.

They communicate with each other frequently (hundreds of posts a day), they support each other, speak the same language and share a common aim and they LOVE being part of something bigger than themselves.

Do you think you that you can get 5200 people supporting each other in this way on FB and Twitter?

Maybe you can, but I haven’t seen much evidence of this.

And you know, as well as creating these tribes of incredible people, I’ve also managed to monetise both villages to the tune of well over 6-figures a year.

My point is (and i’m sure that there are many people who may argue) that the BIG social media platforms are great for general socialising, chit-chatting, shooting the breeze, making announcements, advertising and pointing people to other things that you may want them to see but in terms of building, growing and supporting your tribe it leaves a lot to be desired.

That why you MUST have a village (community site). Your tribe needs a place to live and YOU owe it to them to build it for them.

There are plenty of great platforms for building your village (I choose Ning because it’s easy) so there’s no excuse not to get building.

Build your village, invite your tribe, keep them connected and a funny thing happens.

You make money, almost without trying.

Build your village!

Learning Internet Marketing 105 – Social Media – (Facebook)

Introduction

There are 5 Critical Steps to optimising your position in relation to other businesses on the Internet. The five critical steps in learning Internet marketing strategies are – The blog – Social media – Video online – Social bookmarking and – Content sharing sites

The pivotal element in learning Internet marketing strategies is the blog but it equally relies on the other four elements to be completely effective.

In this article on learning Internet marketing I will discuss the social media strategy used to increase your presence on the Internet and will particularly focus on Facebook as just one tactic in a range of strategies. I will also discuss the relationship of Facebook in your overall Internet marketing strategy.

Definition

Facebook is defined in Wikipedia as a free-access social networking website that is operated and privately owned by Facebook Inc. Users can join networks organized by city, workplace, school, and region to connect and interact with other people. People can also add friends and send them messages, and update their personal profiles to notify friends about themselves.

The website’s name actually refers to the paper facebooks depicting members of a campus community that some US colleges and preparatory schools give to incoming students, faculty, and staff as a way to get to know other people on campus. (see wikipedia entry for Facebook)

Facebook as a Tactic

Facebook is actually a key tactic or platform used to socially and virally interact within a particular group or other network. This can include people who have an association with others not necessarily in the same certain geographical location. It is probably the most popular tactic or tool in the social media strategy.

It has some very distinct advantages over many other social media in that it has a high level of interaction with other followers, it establishes and maintains connections that are more personal in nature and even more importantly it has no social, economic, sectarian barriers that other forms of communication may have.

Actually, Facebook introduces a new element to the whole area of marketing in that it not only meets your search engine marketing strategies, it also establishes your social network marketing strategies. I will explain this in a little more detail.

Search engine marketing strategies can be established and enhanced through the social media. By carefully identifying the various groups you can easily target specific niches and therefore focus your marketing activities. Because of the extremely social nature of Facebook participants they are always willing to openly share even there most intimate details and thoughts.

The visibility of its members is increased the more they interact and the more they open up their inner most thought. By their very nature Facebook members are very open and this makes it easier for them to communicate with people from all areas of society. Some of the social networks become strong business networks over time.

Some amazing statistics

Recent figures indicate that Facebook has over 200 million users and over half of these have daily contact online. More than two-thirds of Facebook users are now outside of colleges with the fastest growing demographic being those people over 35 years of age. On average a Facebook member has at least 120 friends on the site and something like 3.5 billion minutes are spent online each day.

Each month more than 850 million photos and more than 8 million videos are uploaded while more than a billion pieces of content (web links, news stories, blog posts, notes and photos etc.,) are shared each week. There are also 2.5 million events created on the site each month. (see Facebook statistics)

These figures all clearly demonstrate the enormous influence just this one tactic in social media has to impact on not only the social lives of its members but on the corporate marketing strategies as well.

With all of this activity on Facebook there is no wonder that it is a very rich source for search engine traffic and search engine optimization. Corporate members can easily test and measure the effectiveness of their marketing campaigns quickly, easily and extremely cost effectively. Even if they were using the paid advertising, the return on investment for a specifically targeted campaign can be extremely high. Considering the traffic, more potential subscribers the greater the number of paying clients.

In this article I have specifically focused on Facebook but I must emphasise that this is just one of many social media available today. Others include MySpace, Bebo, LinkediIn, Orkut, Skyrck, Hi5 to name just a few of the major players in this social media group. They each have their own niche areas and specialties but they all form part of the viral Internet marketing strategies available to every home on the planet as well as every office in the corporate world.

In conclusion

Social media is just another major strategy in the ever increasing world of learning Internet marketing strategies with Facebook being one of a plethora of tactics, or platforms used in viral marketing strategies. It is a social as well as corporate reality that while some critics may doubt its validity as a genuine marketing tool the myriad statistics would prove otherwise.

In the next few articles I will discuss some of the other social media including the micro blogger; Twitter, as well as video sharing through YouTube.