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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:

Spot on! another (6th) step is to do Competitive Analysis. Every market has usually multiple competitors; if there's no competitor then ask yourself "whether people really want this thing?"
The sales forecast and then a cash flow statement are excellent starting points. You will know immediately if you have a potentially viable business with those reports.
The 4 categories of the SWOT analysis are very important to be noted to plan before starting a business.
thank you, nice article. I've learned a lot of things From: http://tubephanoi.vn/
very interesting, I just read it and I started the business should be useful information such as material, thank you very much
Wonderful post,since SWOT analysis can do wonder for any type of business plan & further it leads to simple, practical strategy. Also sales forecast helps to plan out business strategy well in advance.
Before starting any business you should much aware of local market trend, i mean market survey is very important either start business locally or internationally. I recommend "SWOT ANALYSIS" for every beginners.
5 Ways to Start a Business Plan
The SWOT analysis is vitally important. Especially the piece of it regarding competitor analysis. It's easy to start a business and waste tons of time doing the wrong thing before finding out there either isn't a market for what you have, or someone else is doing it so well that your barrier to entry is extremely high. Thanks for the great article!

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