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Most Successful Businesses Start With a Plan . . . Period

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Most Successful Businesses Start With a Plan . . . Period

By nicoj
Published: September 13, 2011 Updated: May 21, 2012

By Dennis Byrne

Years ago I left my job with a major energy company that had reorganized. Like some of my colleagues who were also searching for opportunity in equally green or greener pastures I looked into owning my own small business. Unlike my Mom, who owned two successful small businesses for some 40 years, I wasn’t just going to simply take a leap of faith like she did and expect to be equally successful. My appetite for risk wasn’t quite the same as hers.

The first and most important thing I learned after many meetings with the local SBA office, SCORE America’s Counselors to Small Business, and numerous discussions with family, friends and colleagues, was that most successful businesses start with a business plan. You simply have to have one. A good one! Not only do you need to know where you are going but if you expect to ask a lender for the money you need, then the lender is going to want to know where you’re going, as well. In some detail. 

A business plan precisely:

·          defines your business

·          identifies your goals

·          and lays out how you are going to achieve those goals

 

It also helps you to:

·         allocate resources properly

·         handle unforeseen complications

·         and make good business decisions

A good business plan (and I emphasize good) provides specific and organized information about your company and how you plan to repay borrowed money. It is a crucial part of any loan application.

 

Before you write the plan answer these four questions:

  • What service or product does your business provide and what needs does it fill?

  • Who are the potential customers for your product or service and why will they purchase it from you?

  •  How will you reach your potential customers?

  • Where will you get the financial resources to start your business?

Although there is no single formula for developing a business plan, some elements are common to all business plans. 

Start with:

  • a cover sheet

  • a statement of your business purpose

  • a table of contents, and

  • an executive summary that includes your business idea and capital requirements, what your business will look like and how you intend to market it.

Most of all you’ll want to provide detailed financial data in a three-year summary, which includes:

·         detailed projections of cash flow

·         costs and income

·         organized month-by-month for the first year and quarter-by-quarter for the second and third years

·         and, a discussion of the assumptions on which your projections are based.

You can find a detailed guide to producing a solid business plan on the SBA Web site at www.sba.gov/smallbusinessplan.

For a template to follow while writing your business plan, simply go to the SBA website http://www.sba.gov/content/templates-writing-business-plan.  

Postscript: So, did I start that small business? Not tellin’. But my son owns two small businesses and I’m encouraging my three daughters along that same path. Perhaps entrepreneurship skips a generation now and then. And maybe not . . . there’s still time.

About the Author:

Nico Janssen
My name is Nico and I'm serving as a moderator for the Community.

Comments:

I think that the most important part of starting a business is in the planning stages. Too many business owners get in an encounter situations that they never even dreamed of. It is important that you plan out specific milestones and what you would like to do when you reach those milestones. Milestones can bring focus when the unexpected scenarios and decisions pop up along the way. You can't plan for everything but you can definitely try!
I do have a nice business plan, but I need some investors. Can you suggest me any thing regarding finding the right investor?
This is the best blog I've ever seen in my life! I really appreciate you taking the time out of your busy day to share your this with everyone.
There's just so much work to be done if you want to succeed in any business and like they say "if you fail to plan, you plan to fail". I know it's easily said, but if you rationalize some of your failures you'd understand that it's quite true.King Size Electric Blankets
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Thank you, for your important information. I think This information is very helpful and also very well organized. I also appreciate the links you added here. ThanksShajid Takeshi Yashima: Investment and Financial Education Blog This post was edited to remove a link. Please review our Community Best Practices for more information about how best to participate in our online discussions. Thank you.
Really good advice. I also find that having a long term relationship with a bank and illustrating to them where you have had previous success to reduce the risk helped me greatly when I recently went out to get a business loan. I agree that having the goals and the business model is very important to them taking your business seriously. RSA Certificate
Thank you! I agree this information is very helpful and also very well organized. I also appreciate the links that you included.
of courser the most successful business starts with a plan. i had to plan to make my own business successuf alkaline water ionizers
This is extremely good information. The one tip I can provide after starting a few busineeses in life is that what you don't know in business CAN hurt you so, it is usually a good philosophy when putting together a business plan to talk to others who have been successful at starting the same or similar businesses to avoid encountering unknown situations or forces not expected during the first 2 years of ownership. Get other owners to tell you of the problems you can expect to encounter and then find ways to offset those problems. I have found in the past, it is generally about 1 1/2 years up to 2 years before a business can see a profit margin so it is important to expect to 'feed' the business money during this time frame. Hopefully this tid-bit will help someone find success where maybe not knowing this, they might not have succeeded. Medical Malpractice Lawyers

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