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.
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.