(Liz Uram) What You Need to Know About Business Plans
by Liz Uram | Feb. 20, 2013
Let's face it. No one comes rushing up to me asking to help them prepare a business plan. The very words 'business plan' seem to produce an immediate glaze over some solo entrepreneur's eyes. Business plans can seem boring on the surface but they are the foundation of a solid business. Yeah, I know, that still sounds boring. Whoever said everything about business had to be exciting?
I'm passionate about educating solo entrepreneurs about the importance of planning because the statistics are pretty grim for those who skip this vital step. One study shows that only 5% of business owners have a business plan. A separate study shows that 95% of businesses don't last 5 years. Think there's a correlation there? It's one of those things that you know is good for you but hard to believe you need it until it's too late.
So why don't people take the time to put a plan together? Mainly because they hear the words business plan and think it's a bunch of useless information that they will never need. Not so and that is why I'm making it my mission to inform business owners about the benefits of doing a business plan. In order to understand the benefits it's important to know the different parts of the plan. Now, this can be as complicated as you want it to be but I prefer a simple approach so I'll share what I cover with my clients:
1) Overview. The overview contains the most basic information about your business. But don't be fooled. Just because it's basic doesn't mean it's not important. We review several categories but the most important one is the company mission statement. The stated purpose for your company. Many business owners gloss over this but it provides a reference point that helps make decisions down the road that are in line with why the company exists.
2) Products and Services. You need to know what you're selling and at what price. Spending some time on this section helps ensure that you have the right mix to support your revenue goals. One area that most solo entrepreneurs have difficulty with is pricing. The pricing challenges get ironed out in the section.
3) Marketing Plan. The all important marketing plan. Without it you will end spending all kinds of time and money on marketing activities that won't get the results you need.
4) Operation Plan. This section covers how you will do business. Another section that the solo entrepreneur can easily brush off with the misguided notion that it doesn't apply because they are working out of their home office. If you don't want your business running you then you want to define your hours of operation in this section along with other important information.
5) Management and Organization. Again, another section that is easy for the solo entrepreneur to overlook because you work alone right? Well, this isn't necessarily about management of employees. This section allows you to think about functions you can outsource like accounting and virtual assistance.
I hope I've at least provided a little food for thought and have spiked your curiosity a little. My encouragement for you is to at least take a closer look if you haven't done a plan yet. I take the pain out of it as much as possible by walking my clients through the process hand in hand. I've never had any regret the process. Why? Because what they learn about themselves (I include a strengths assessment in my program) and their business during the process provides an indescribable level of belief and commitment that just wasn't there before. It's why I do what I do. Remember, you can achieve whatever you believe as long as you are willing to work for it!
About Liz Uram
Liz Uram helps solo entrepreneurs attract more qualified leads, get more clients, and make more money by developing business and marketing plans. She is a certified professional coach, has a B.A. in Organizational Leadership, is the author of 'How to Organize & Manage Your Time - A One Year Planning and Action Guide', and is an award-winning speaker. Visit http://www.coachandmentor.net to learn more.
About Chia-Li Chien
Chia-Li Chien, CFP®, CRPC, PMP; Chia-Li “like JOLLY,” Succession Strategist of Value Growth Institute, dedicated to helping private business owners increase their company equity value. She is the award-winning author of the books Show Me The Money and Work toward Reward and a faculty of the American Management Association. Her blog and newsletter was named a Top Small Business Resource by the New York Times You’re the Boss blog. Contact her at email@example.com or (704) 268-9378 .