Ask SCORE: Business Plan - The Only Way to Start a Business
We've stressed the importance of a good business plan a few times in this space, but it is a subject that cannot be over-emphasized because it is so important.
The problem is it continues to be overlooked in the majority of new business startups. The old adage is still true that businesses don't fail because they plan to fail, they fail because they fail to plan.
Just as people with GPS units in their cars love the convenience of simply entering locations and receiving step-by-step directions for getting there safe and sound, so entrepreneurs need their own "GPS" - a business plan - to help find small business success. But unlike the electronic GPS units, a business plan doesn't come with a pre-programmed route to "Easy Street."
It's up to the aspiring small business owner to collect and analyze information related to the owner's business idea. Only then can one determine the best way to get that idea from idea to reality and on to a profitable business.
The prospect of preparing a business plan may seem rather intimidating to the owner. Though it does require time and effort, most aspiring entrepreneurs soon find the exercise enjoyable and self-sustaining - the more they explore the opportunities and challenges for their idea, the more they want to know.
They also realize that just as a poorly programmed GPS will result in getting lost, a poorly prepared business plan will imperil their small business dreams.
But there is help available. Preparing a business plan has never been easier. There are many software tools and templates available to provide guidance through the various sections (market analysis; proposed company description, organization and management; customer base; and financial projections).
There's also room for creativity, particularly since the business plan may be used to get banks and other potential investors excited about supporting the venture. For that reason, entrepreneur and nationally syndicated columnist Rhonda Abrams suggests "spicing up" a business plan with features such as PowerPoint slides, relevant charts and graphics, and even a website or video.
"Whether you present your plan in person or by email, readers' attention spans are short," Abrams explains. "You need to get key information across quickly."
And just as an in-car GPS requires regular updates, so does a business plan. It is a work in progress. That's because a small business should always evolve and adapt in response to national and local economic changes, new technologies, and shifts in consumer preferences.
Abrams suggests the following schedule for business plan reviews/updates:
n Annually - A basic evaluation. Look for changes in your target market, areas that may need to be reprioritized, and ways to improve the efficiency of your operations.
n Every 3-5 years - A more comprehensive review looking for significant growth in sales or revenue.
n After a major shift in your industry or other critical event - Examples include a new regulatory requirement, a natural disaster or act of terrorism, or entry of a major new competitor.
Being faithful to such a schedule will keep the business vibrant and in tune with the market environment. That is a key to business success.
To learn more about business planning, contact SCORE, a nationwide nonprofit association of experienced business people who provide free, confidential business counseling to small business owners. The Sandhills chapter is active in counseling, mentoring and presenting free business seminars.
If you wish to speak to SCORE about your business, please register as a client by entering your information at www.edmisscore.org/0364, and one of our counselors will contact you.
In addition to counseling by appointment, the Sandhills chapter has drop-in service, for those who have registered, from 10 a.m. to noon Tuesdays and Fridays at the Moore County Chamber of Commerce building on U.S. 15-501 in Southern Pines. The phone number is (910) 692-3926.
More information on SCORE's counseling activity can be found at the Sandhills SCORE website, www.sandhillsscore.org.
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