Starting a business? Just fill in the blanks…

If you believe all the advertising hype on the internet about fill in the blank business plans, you’d think that’s really all there was to it. Fill in the blanks business plan, one-page business plan, connect the dots business plan, what’s next, the Crayola business plan? Let your child’s kindergarten class write your business plan with a box of 64 crayons!

Lest anyone misunderstand, let’s be clear: it’s not the business plan document, but the business planning that’s important. The problem is this; these types of documents are targeted at folks who don’t know what they are doing. And whatever preparation is suggested by people or groups perceived as “professionals” will set the maximum bar for preparation. So if you suggest that a startup can create a one-page or fill in the blanks business plan and sell them a template to do so, that’s all the research their writers are going to do. And just enough research to fill in a few blanks is just enough to get them into trouble.

I’m not talking about professional entrepreneurs working for existing or big-time startup companies. They aren’t the target audience for these business plan products in the first place. The target for these so-called business plan templates are inexperienced first-time entrepreneurs who don’t know what they’re doing. To suggest that they can put their business plan in a few blanks is just non-sense. This is a marketing scheme designed to make money on the gullible. Most of these people aren’t ready to be business owners. If they don’t do their research and just start a business, the likelihood of failure is even higher than it is in the first place. And with that rate running in excess of 75%, anyone suggesting that a newbie just fill in a few blanks is helping that person fail. It’s as simple as that.

Again, this isn’t about the business plan document. It’s about understanding your market and the trends that will affect how your market does business in the future. It’s about understanding your competition and how they do business. It’s about understanding your target customer and what they want. It’s about having some understanding of whether your model is even viable in the first place. And for many first-time entrepreneurs looking for the easiest way to get into business, they are going to do just enough research and planning as necessary to write a business plan and no more. Whose fault is that? It’s their fault. BUT, if you’re a professional consultant, incubator group, or author, and you suggest that these people can do it by filling in a few blanks, shame on you.  If you are a first-time entrepreneur, don’t fall for this hype. And if I may sort of paraphrase a famous quote by John Wayne: “Starting a business is hard, and it’s even harder if you’re stupid.”

Don’t be stupid. Do your homework. It’s your life’s savings we’re talking about. Don’t throw it away on a harebrained idea. Don’t throw it away because you didn’t bother to do a few hours’ worth of research. This idea and the associated products is just like everything else in this life that seems too good to be true. It’s not true!

 If you do your research, you can write a one paragraph business plan for all I care. Heck, you can skip writing the document all together, because that’s not what is important. The business plan document is just a way to communicate to others a summary of your plans and research. And seasoned business professionals and entrepreneurs understand all this. They will write a business plan document to support whatever their need; be it funding from investors or recruiting employees at a job fair. And responsible professionals will support this idea. There are plenty of groups helping entrepreneurs write a short and sweet business plan, in some cases a one pager, but it’s backed by research. In fact, it’s a one-page summary of your research and your business model. You know, that sounds an awful lot like an executive summary to me.  

Recipe for Success: Do Your Research

As we begin part two of a who-knows-how-many part series on creating success, we’ll be talking about research. This is one of those areas that many hopeful small business owners would rather skip. You’ve been working in your industry or around your industry or as one most likely unsuccessful restaurant entrepreneur told me once told me when I asked about her industry experience, “I eat at restaurants a lot!” Unless you’ve constantly reading and measuring and following the industry, you’ll need to do some research.

So where do you go to get your information about an industry?

I’m going to give you a list of resources; I don’t have the space in a blog post to tell you how to do it. You can probably figure out that part yourself anyway.

Census Bureau:  http://factfinder.census.gov/ You can also link to the American FactFinder database through my website.

Public Library: I wrote about research librarians in a recent post. Most of you didn’t read it because it sounded boring. Maybe it is, but it also a huge resource.

Virtual Library: Ask your public library about access to special database collections and resources available with a virtual library card.

University Library: The business and research sections of university and community college libraries have great research tools for entrepreneurs. Just ask for help if you don’t know where to start.

Chamber of Commerce: One of the main goals of a chamber of commerce is to support the creation of new businesses.

Trade Associations: Most industries have one or more trade associations to support the membership of the industry. You may have to join to get access to their information, but it’s generally worth it to get that kind of data access.

Small Business Administration: www.SBA.gov/ The SBA has lots of resources for small business owners.

Paid Sources:  There are plenty of paid sources for industry information available to small and big business owners. Big national companies who are in the information providing business are ready, willing and able to help you with your research needs…for a fee.

In addition to these commonly used research sources, there are market testing and focus group activities to tell you specific things about a market. While these activities pay huge dividends in terms of specific preferences, you’ll not typically use them in the beginning phase of research.

Do you have other resources that might be helpful for small business owners? If so, please leave a comment.

For those who want to do it right, get my book Business Start-up 101: From Great Idea to Profit…Quick! It’s a how-to guide for entrepreneurs to take you from great idea, to getting yourself ready, proving your plan, and finally writing a business plan and getting funded.

Start carrying the small stones

A Chinese Proverb says:


The man who removes a mountain begins by carrying away small stones.


Do you feel like doing your business planning and writing your business plan is like moving a mountain? Does the sheer size of the task cause you to shrink from the task? If so, you're not alone. I coach hopeful entrepreneurs in this situation frequently. They see the job as too big, so they just don't start. 


The answer is not to postpone the task yet again, but to start carrying away small stones. Start with a plan template. Of course, I recommend mine. You can get my new book, Business Plan Template, at Amazon or my website www.BusinessStartup101.com in either paperback or Kindle format. Use mine or get your own, but layout the project in terms of your template. For people who have trouble getting started, I recommend starting with the organization description section, because you'll know much of this information up-front without having to do any research. A large portion of this section can be completed quickly and you'll feel a sense of accomplishment and hopefully a new confidence that you really can create a business plan. 


Once the description part is completed, you have to start doing your research. There's no way around that, but at least you've made a dent in the mountain. For many, this getting started is all the push they really needed.




If you need help with your business plan, we can help. Contact me to see if we're right for you. 

PowerPoint, Not Just For Presentations Anymore

One of the fun parts of being a start-up coach and consultant is I get to review lots of business plans. As you would imagine, some are good and others not so much. There has been what I consider an alarming trend over the past few months though. Entrepreneurs are using PowerPoint to create a "business plan." 


Now clearly, you can't write a business plan in PP unless maybe it's for a lemonade stand. Most people are clueless how to use PP to support a presentation, much less use it for a business plan. Don't get me started on the insane presentations people make using PP. Who in their right mind would try to write a business plan using presentation software? I know, it's nuts, but so-called entrepreneurs are doing it every day. 


If you need help writing a real business plan or developing a real presentation, drop me a line. I'm happy to help with either, but we won't be mixing them together.


www.BluePointStrategies.com

ShoestringVenture.com

Thanks to the guys at Shoestring Venture blog for featuring my first book,Business Start-up 101: From Great Idea to Profit...Quick!  Click on the logo below to go to their feature.

   

   

You can buy the book on Amazon by clicking on the link below.  It's available in paperback and Kindle format and comes with handy downloadable templates to help you get started right away.

   

Shoestring Venture

I'm pleased to report that they guys at Shoestring Venture blog will be featuring my first book, Business Start-up 101: From Great Idea to Profit...Quick! on October 27th at 1:00 PM Central Time.  Here's the link:  http://shoestringventure.com/2011/10/27/creating-startup-success/  The link will not be active until Thursday.  Feel free to visit their site by clicking on the Shoestring Venture logo below.

   

  

I appreciate the publicity and encourage you to buy my book if you haven't already done so.  You can buy it through my book website atwww.BusinessStartup101.com, use the link below or go directly to Amazon.  It's available in soft cover for $19.95 or Kindle for $9.95.  The book comes with free downloadable templates for MSWord and Excel.

Business Plan Template

The follow-up book to my #1 Best Selling Business Start-up 101: From Great Idea to Profit...Quick! is now out on my book site www.BusinessStartup101.com and Amazon.  The book is Business Plan Template and is a how-to guide for writing a business plan for any business.

  

   

The book is available in Kindle e-book format and will be available as a paperback on Amazon within the next week.  Please check it out and give me your feedback.  I love to chat with entrepreneurs.

    

Click on this link to buy the book.

What are your business start-up goals?

Why do you want to start a business?  Many people want to start a business for all the wrong reasons.  See the previous posts on that topic.  Let’s change the topic slightly.  What do you hope to accomplish in starting a business.  In other words, what are your business start-up goals?

  

Are you starting a business just so you can get money for stuff?  Extra income for:  cars, boats, houses, travel, hobbies?  What about college education for your kids, medical expenses or retirement?  These are all good goals, but will your new business actually allow you to get there?  And what about time frames?  Over what period of time do you expect to reach these goals?  Does starting a business REALLY help you achieve your goals?

  

Spend some time thinking about your goals.  Why do you want to start a business?  What do you hope to get out of it?  Many would-be entrepreneurs thought that by starting a business they wouldn’t have to work for the ‘man’ any longer.  What they found was they traded one ‘man’ for another.  The new boss is probably much harder to work for and requires significantly longer hours and a much higher quality of work than the old ‘man’ required.

  

Think about your motivation for wanting to start a business.  Discuss your thoughts with your spouse and family.  Make sure that everyone is on the same page and that page isn’t a fairy tale.  Talk with a business coach or mentor to get a reality check on your plans and goals.  If you do the proper planning up front, the end result may be exactly what you wanted.  But a lack of planning may put you worse off than when you started.

Why do you want to start a business?

Starting a new business is a scary and risky proposition.  Starting a new business can be extremely time consuming and may require participation from your family or your absence from family events.  Starting a business may require you to use your life’s savings or borrow money from the bank for which you’ll be personally responsible.  So why do you want to do this?

  

For some people, it’s just a no brainer.  They HAVE to start their own business.  They’ve been working for ‘the man’ for too long or are just tired of seeing a business run into the ground.  For others, they have an idea that just needs to get out.  If not them, who?

  

For still others, they want to start a business out of necessity.  That is, they don’t have a job and have no good prospects for finding one anytime soon.  They see starting a business as a necessary evil.

  

If you plan to make your fortune in a few months and start living the good life, think again.  Most new business owners make little or no income for the first few years in business.  In fact, many times, your employees will make more than you until your business is well established and financially stable.  You need to clearly understand your motivation for starting a business and then decide if starting a business will help you achieve your goals.  

Jim Blasingame: The Small Business Advocate

Jim Blasingame, author and host of the award-winning radio show The Small Business Advocate Show, was in Huntsville to speak to the Women's Business Center of North Alabama today.  The lunch-time keynote was inspiring and informative.  Jim spoke to a full house crowd about the changing nature of business and the relationship that companies have with their customers.  

One of the sponsors of the lunch was Fred Holland and WTKI.  Jim's radio show is carried locally by WTKI, and the radio station bought copies of the book for all in attendance at the event today.  Jim's 2006 book, Three Minutes to Success, is packed with small business lessons that entrepreneurs can read in three minutes.  Short lessons for busy people.  The book can be found on-line and in bookstores.

Jim was kind enough to pose for a photograph for my blog. 

Let the Tsunami Begin!

No, not the destructive wave of dark water that destroys everything in its path, but the wave of start-ups that will spring up all over the country bringing jobs and creating wealth.

  

With the change in political direction brought on by the mid-term elections, expect to see a change in attitude and expectations from business owners and potential entrepreneurs alike.  As I coach with business owners and speak with entrepreneurs, the thing I’ve been hearing over and over is their fear of the unknown and how they are waiting on the sideline for a more certain future before investing their cash.  In fact, I’ve heard more than a few times an even more dire fear from business owners about the direction of the economy and our tax structure based on the actions of our current congress.

  

The new Congress will not be seated until January, but the change in direction coming will give some certainty to business owners who have had none lately.  Business profits have been generally good but we haven’t seen the investment in new plant and equipment or expansion that typically follows because of that uncertainty.

  

While I’m a strong conservative, this site is not about politics.  It’s about helping entrepreneurs turn their dreams into profitable businesses.  The political climate has cleared a little and the future may seem a little brighter for business interests this morning.  The key for hopeful entrepreneurs is to continue to do your research and test your idea for viability.  Don’t think that just because the political environment has changed that you’ll automatically be successful.  It doesn’t work that way.  And a bad idea is still a bad idea even in a great economy.

Elevator Pitch

What's your elevator pitch?  Do you have an engaging appeal?

Most entrepreneurs have really lousy elevator pitches.  They drone on and on listing the services they offer without ever truly engaging the recipient.  What they fail to realize is IT'S NOT ABOUT YOU.  It's about your client and what's important to them.  If you are listing services and features, you'll put your potential customer or contact to sleep faster than reading the Windows program manual.

Every once in a while I'll hear a really good elevator pitch.  Think yours is good?  If you live in North Alabama, why not enter it in the BizTech Elevator Pitch Contest on November 19th.  You'll need to get your entry in by Today, so get to it.  You can download an entry form and get all the contest rules by going to www.biztech.org .

Don't feel like entering the contest or don't live in North Alabama?  Then let's hear them here.  Send me the link to you giving your elevator pitch on YouTube and I'll give you some feedback.  If it's a real winner, I'll post it here on my blog.

Let the pitches begin...

Are Business Plans Still Relevant?

There's a lot of discussion on business blogs, LinedIn, Internet sites, financing groups and other places about the relevance of business plans in today's times.  Many of the VC organizations suggest that a formal business plan is no longer necessary as their participants and other angel groups don't bother to read them.

Maybe it's just the circles I run in versus the circles of the big NYC, Chicago, LA guys, but almost every financing group I know (including angel groups) require a business plan to even get in the door.

But aside from financing requirements, I believe that the planning activity is the most important factor, followed by an actual written business or strategic plan.  In fact, I commented on one of the LinkedIn groups the following:

What's important is researching the market to determine the industry trends, competition and customers, considering how you'll handle marketing and completing a viability analysis. Business owners need to have some sort of reasonable expectation that the business model is viable before launching. Anything short of that is just gambling. Saying you have to get to market quick is not an excuse to skip the market research, unless you're already an expert in that business. If you've been working in the industry, you may already have much of this research at hand. But my experience is that most people who say they have this information are in fact just lazy and don't want to take the time to properly analyze the market. 

What do you have to say on this topic?  Do you believe that the business plan is a thing of the past or an integral part of a start-up?

Business Start-up 101

My new book, Business Start-up 101, From Great Idea to Profit...Quick! is due out September 13th.  You can pre-order your copy by September 3rd and receive an autographed copy.  It's a 'how to' guide for entrepreneurs.  You don't need an Ivy League MBA to start a business, you just need to know the rules.  Business Start-up 101 will teach you the rules and help you develop your idea and prepare for success.  It's available fromwwww.BusinessStartup101.com , www.BluePointStrategies.com.  After September 3rd it will also be available on Amazon both in print and Kindle format.

What's in a plan?

So what should be included in a business plan?  Do I really need one?  That's a lot of work just for a thick report that I won't ever look at again.

Sound familiar?  Some of these issues were addressed in a previous entry.  The do I really need a business plan type questions were addressed in the December 9th post "DO I REALLY NEED A BUSINESS PLAN?".  The question of what should be included in a business plan is one I get asked frequently.  So frequently, that I have posted a Sample Business Plan Table of Contents on the resources page of my main site.  Each business and the environment in which it operates is different from most every other business.  My Sample Business Plan Table of Contents is merely a suggested starting point.  Use this list and add to or subtract from it to make it appropriate for your business.

You can download my complete sample above or by going to the resources & links page of the web site.  Here are the major topics that should be covered in most every business plan.

Executive Summary
Organization
Industry & Markets
Marketing Plan
Financial Plans
Addenda

The Executive Summary should be a one-page summary of your entire plan.  It should include a summary of need, that is how much money do you need to borrow or want from an investor, how you will repay the money and what it will be used for.  You should also discuss the overview of your business and a brief summary of your marketing plan.

In the Organization section, you should describe your company from a physical, technological and intellectual standpoint.  Who are the main players, what are their qualifications, what are your professional associations, how will you handle accounting and business records and so forth.

The Industry & Markets section is one of the most important.  In this area you will discuss your industry, trends and special rules and laws that apply to your industry.  Then in more detail, you'll discuss your particular market segment within the industry.  Describe each of your competitors and what they do well and not so well.  Then identify your customers being as specific as possible.  The more specific you can be about your customers likes, dislikes, locations and so forth, the better able you'll be to provide the exact product that they need the way in which they want it.  Finally, you'll need to describe your company in strategic terms.  A SWOT analysis (Strengths, Weaknesses, Opportunities and Threats) is a good method of categorizing your firm and identifying, well, strengths, weaknesses, opportunities and threats.

The Marketing Plan describes how you will promote your product or service, how it will be priced and how you'll get the product to market.  An important part of the marketing plan is a means for measuring your success.  If you don't have an objective and a means to measure whether or not you've achieved success, how will you know i you got there?  Before you begin is the time to do this.

The final section of the plan is the Financial Plan.  In this section you'll identify your financial goals and objectives and describe the assumptions that drive your financial statements.  Historical and at least three years of pro forma statements are the general rule.  You should include an income statement, cash flow report, balance sheet, sales projections, start-up expenses, capital investments and so forth in this section.

The Addenda section is a catch-all section for additional supporting documents required by the reader of the plan.  The contents of the addenda will be driven by the banker, investor or other reader. 

The business plan can be a complicated and detailed document.  But don't let that stop you.  Pick a format and attack the process one section at a time.  I start with the sections that I know off the top of my head and work into the sections that will require research.  I generally put together a preliminary income statement and cash flow report and modify the assumptions and projections as I do my research.  Be careful not to modify your financial projections arbitrarily.  Be conservative, that is, assume you'll sell less that you hope to sell and assume your costs will be higher than you think they will.  It's always better to beat your projections than be surprised by how much it really costs to operate a business.

If you need help putting together your business plan or creating the financial statements to reflect your assumptions, give us a call and we'll see if it makes sense for us to work together.

Do I really need a business plan?

I get asked this question frequently.  At networking events, seminars and classes, coaching sessions.  New and prospective business owners want to shorten the process from great idea to opening the doors.  I can't blame them for wanting to get on with it.  You have what you think is an awesome idea and you're ready to take on the world with it, and right now.  I get it.

The dialogue goes something like this:

Client: "Do I really need a business plan?"

Me: "YES"  

Client: "But I'm not getting a bank loan, why do I need a business plan?"  

Me: "Oh, so you don't mind if your business fails?"

Client:  "Huh?  How does a giant report keep me from going out of business?"

Me:  "It doesn't.  One has nothing to do with the other."

Client: "Then why do I need a business plan?"

Me: "So you won't go out of business."

Client: "Huh?"

Partially I'm exaggerating to make a point and partially it really does go exactly like that.  The question the client is really asking me is do they need a fancy business plan DOCUMENT.  The answer of course is, it all depends.  But before we get to that, let's answer the unasked question first.

Every business needs a business plan.  Period.  Especially a new business.  How do you know exactly what product the market needs and how to market that product, the best distribution channels and pricing?  How do you know if you have enough start-up capital to endure the lean beginning months?  I think most people understand that the process of business planning, thinking through the issues from how to organize your company, to understanding the markets and competitors and customers and the strengths and weaknesses of your company is key to insuring the success of your new venture.  And generally speaking, even the client asking the silly question really understands that most of the time.  What they really want to know is, do I need a fancy document?

Let me expand on "it depends".  First you need to define the purpose of the document.  Is it for your banker or investment partner whom your asking for money?  Is it for your insurance company trying to get you product liability or other insurance coverage?  Is it for your management team to track the start-up progress?  Maybe you'll use the document as a recruiting tool for new employees or a communications tool for existing employees.

I generally recommend one of three options depending on the situation:

Formal Business Plan - This is the biggest and fanciest plan.  It should leave nothing out and give extraordinary details and have complete financial analysis and pro forma statements and a full range of addenda.  This plan is for bankers, investors, insurance companies and so forth.

Informal Business Plan - This document is typically used for your internal purposes.  Your management team will want to use this version of your plan.  You won't need all the details about the company and resumes of principals, I assume everyone knows this stuff already.  The informal plan will have details on industry and markets, competition and customers, your company and its products.  The financial statements will likely not be far out projections, but rather this years budget.  Addenda items are likely not needed either.

Summary Business Plan - This document is for outside, non-confidential viewing.  A summary business plan document can be used as a communication tool for your employees or used for recruitment of new employees.  You can use this version of the plan for general communication purposes and possibly new releases.  It will be only a summary of your plan, more of an expanded executive summary rather than a plan document.  This version should be a summary only and not contain any confidential information and only limited summary financial plans.  Financial information should be more in the form of general company goals and ranges of revenues rather than specific numbers.

Of course, there are as many different business plan document types as there are situations for using them.  Use common sense and the needs of the audience to craft a document that fits the situation.

Starting a Business 101

Blue Point Strategies has announced the next offering in its business education series, START A BUSINESS 101 class.  The class will include a five night classroom instruction session plus a one-on-one coaching session to get your business started on the right footing.  If you're interested in starting a business and just aren't sure if starting a business is right for you or you don't know where to begin, this is the class for you. 

The class will begin on February 8, 2010 and will run for five weeks on Monday evenings from 5:30 PM until 7:30 PM.  The class will take place at the APEX Business Center at 600 Boulevard South, Suite 104, Huntsville, AL 35802.

The class schedule includes:

Feb 8th:  Thinking About entrepreneurship
Feb 15th:  Understanding Your Market
Feb 22nd:  The Marketing Plan
Mar 1st:  Business Financials
Mar 8th:  Business Plans & Performance Measures

The final session is a one-on-one coaching session with the instructor,Chris Gattis.  In this session, Chris will review your business plan and financial statements and help put the finishing touches on your plan and get you ready to start your business.  If you're still in the thinking stage, he'll help you fine tune your strategy plan and clarify your options.

The cost of the class is $299 and includes a Knowledge Binder with CD that includes the MS Word and Excel templates that help create a business plan and financial statements. 

Starting a Business 101 - Information Flyer

Start your new year off right by getting the education that you need to start and succeed in a new business.  Sign up today.

For more information and directions to the APEX Business Center, download the pdf flyer of class information.  To register for the class, call Chris Gattis at (256) 425-8787 or email atclass@BluePointStrategies.com or signup on the web page. 

Payment for the class can be made by check or credit card.  Seating in the class is limited, so sign up today.