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5 Ways to Start a Business Plan

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5 Ways to Start a Business Plan

By Tim Berry, Guest Blogger
Published: September 25, 2013

How do you get started on a business plan? It depends on who you are, what you like, what you do well and how you think. People are all different. I say think of a business plan as a collection of components or modules, and start wherever you feel like it. Here are five specific suggestions, based on the idea that people should start with what’s best for the individual, depending on style. Which one is best for you?

1. Do a SWOT analysis. That’s a collection of thoughts organized into four categories: strengths, weaknesses, opportunities and threats. Ideally you gather a small group of people together for just an hour or two, you have somewhere to write out thoughts into bullet points. This YouTube video on SWOT gives a simple example. The SWOT almost always leads to simple, practical strategy.

It’s really hard to do a SWOT without thinking about how to focus on strengths, work around weaknesses, seize opportunities and avoid threats. Everybody does that.

2. Do a simple sales forecast. Do it for a few months at the very least, ideally 12 months by month and two more years just annually. Break your forecast into units, average revenue per unit, sales, average cost per unit and costs. The math is simple. Sales is units times revenue. Costs are units times average cost per unit. Here’s how to do a forecast for a new product. And here are some general tips on doing a sales forecast.

What happens to most people is that thinking through the details of the sales forecast gets you into business planning. You can’t help thinking about prices, costs, target markets, strategy and focus. I believe that somebody who manages with a sales forecast, and does plan vs. actual results analysis every month, has a business plan. Even if they do nothing else.

3. Do the big picture in a vision statement, mission statement or mantra. The mission statement is about what your business does for the customer, the employee, and the owner. The vision statement is a view of what you want the business to be three years from now. And a mantra is a simple sentence summary. For more on those, here’s a link to how to do mission, vision, and mantra.

Try to avoid simple hype. Test yourself: does this describe my business is a way that it would rule out any of my competitors? Would a customer read this and identify my business with it? Is this what one customer would tell another about your business?

4. Develop your core market story. Invent an ideal buyer and tell yourself the story of how the buyer identifies a problem, or something he or she wants, searches for it, and finds your business. Make the story an explanation of what the problem was and how your business solved it. For more on this, try every business needs a market-defining story.

5. Talk to 10 customers. I’m always amazed at how much business thinking comes out of the simple process of talking to real people about your real business. Do it right: Find people willing to talk to you and take some time with them. Start by making sure they don’t think they are supposed to tell you what you want to hear, but rather, the truth.

Any one of these five first steps might be right for you. All of them can help you get going, and they are all good steps to take regardless of what follows.

About the Author:

Tim Berry

Guest Blogger

Founder and Chairman of Palo Alto Software and bplans.com, on twitter as Timberry, blogging at timberry.bplans.com. His collected posts are at blog.timberry.com. Stanford MBA. Married 44 years, father of 5. Author of business plan software Business Plan Pro and www.liveplan.com and books including The Plan As You Go Business Plan, published by Entrepreneur Press, 2008.

Comments:

Foundations are important.
raw materials
It was very Informative.
A SWOT is always the first step and must be done properly especially because it is often the basis of the next ones!
Excellent advice. Choose a business card made of quality paper stock and designed to impress your customers because your business card is a reflection of your business.
This looks like a good explanation of ways to tread on a business path, especially the SWOT analysis and talking to customers directly so that you are prepared with the threat level and can take the real time feedback as well. Thanks Mate.
This is great info. I think too many small business people jump into the fray w/o taking the time to understand their market from the owner's perspective. Great info!
For staring a business this tips are really very helpful and recommendable. the way you explain these five steps like Do a SWOT analysis, Do a simple sales forecast,Do the big picture in a vision statement, mission statement or mantra, Develop your core market story and talk to 10 customer is very impressive and effective. We must follow.
If you want to start a business, create a time line and review it monthly to see how you are progressing.I think this is essential.
The tips are really helpful in every business who is just starting. A SWOT analysis is really required as it gives business owners the idea to where and what should be done first. Thank you for the tips.

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