Information storming for your business plan

Gathering Information For Your Plan


By Palo Alto Software, Inc.

A common problem people encounter when writing their business plan is finding information about their business industry and competitive companies. Fortunately, in recent years the Internet has made information gathering simple and easy, but sometimes the best information is found much closer to home, with real people, in real time.

Always take a look at other businesses similar to your own, as a very good first step. If you're looking at starting a new business, you may well be starting one similar to one you already know. If you're doing a plan for an existing business, you are even more likely to know the business well. Even so, you can still learn a lot by looking at other similar businesses.

• Look at existing, similar businesses.
  
• If you are planning a retail shoe store, for example, spend some time looking at existing retail shoe store businesses. Park across the street and count the customers that go into the store. Note how long they stay inside, and how many come out with boxes that look like purchased shoes. You can probably even count how many pairs of shoes each customer buys. Browse the store and look at prices. Look at several stores, including the discount shoe stores and department store shoe departments.


• Find a similar business in another place.
  
• Find a similar business far enough away that you won't compete. For the shoe store example, you would identify shoe stores in similar towns in other states. Call the owner, explain your purpose truthfully, and ask about the business.


• Scan local newspapers for people selling a similar business.
  
• Contact the broker and ask for as much information as possible. If you are thinking of creating a shoe store and you find one for sale, you should consider yourself a prospective buyer. Maybe buying the existing store is the best thing. Even if you don't buy, the information you gain will be very valuable. Why is the owner selling? Is there something wrong with the business? You can probably get detailed financial information.


• Always shop the competition.
  
• If you're in the restaurant business, patronize your competition once a month, rotating through different restaurants. If you own a shoe store, shop your competition once a month, and visit different stores.

It takes a little hard work but by using the Internet and doing some research at local businesses, you should be able to gather all the information necessary for your business plan.

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Business Plan Basics

Business Plan Basics

By Palo Alto Software, Inc.

The best way to show bankers, venture capitalists, and angel
investors that you are worthy of financial support is to show
them a great business plan. Make sure that your plan is clear,
focused and realistic. Then show them that you have the tools,
talent and team to make it happen. Your business plan is like
your calling card, it will get you in the door where you'll have
to convince investors and loan officers that you can put your
plan into action.

Once you have raised the money to start or expand your business,
your plan will serve as a road map for your business. It is not
a static document that you write once and put away. You will
reference it often, making sure you stay focused and on track,
and meet milestones. It will change and develop as your business
evolves.

Do I need a business plan?

---

Not everyone who starts and runs a business begins with a
business plan, but it certainly helps to have one. If you are
seeking funding from a venture capitalist, you will certainly
need a comprehensive business plan that is well thought out and
contains sound business reasoning.

If you are approaching a banker for a loan for a start-up
business, your loan officer may suggest a Small Business
Administration (SBA) loan, which will require a business plan. If
you have an existing business and are approaching a bank for
capital to expand the business, they often will not require a
business plan, but they may look more favorably on your
application if you have one.

Reasons for writing a business plan include:

• Support a loan application


• Raise equity funding


• Define and fix objectives and programs to achieve those
  objectives


• Create regular business review and course correction


• Define a new business


• Define agreements between partners


• Set a value on a business for sale or legal purposes


• Evaluate a new product line, promotion, or expansion

What's in a business plan?

---

A business plan should prove that your business will generate
enough revenue to cover your expenses and make a satisfactory
return for bankers or investors.

1. Executive Summary--features the highlights of your plan and
   sells your idea in two pages or less.


2. Company Summary--a factual description of your company,
   ownership, and history.


3. Products (or Services or both)--describes your products
   and/or services and how they stand out from competitive products
   and services.


4. Market Analysis-provides a summary of your typical customers,
   competitive landscape, market size, and expected market
   growth.


5. Strategy and Implementation-describes how you will sell your
   product, how you will put your plan into action, and establishes
   milestones.


6. Management Summary-provides background on the management
   team, their experiences, and key accomplishments.


7. Financial Plan-contains key financials including sales, cash
   flow, and profits.

What makes a successful business plan?

• A well thought out idea


• Clear and concise writing


• A clear and logical structure


• Illustrates management's ability to make the business a
  success


• Shows profitability

How do you write a business plan?

---

Sitting down looking at a blank computer screen as you prepare to
start your business plan can be daunting. You may want to look
at some alternatives that will make the process a bit easier.

Hire a Professional

A professional consultant will create the business plan for you,
but you still have to be prepared to think through your business
and understand the underlying concepts in your business idea.
You will have to work closely with the consultant to ensure that
he or she develops a good plan that accurately represents your
business or business idea. You can find a list of business
planning consultants at www.planconsultants.com.

Buy a Book

There are many good books on the market that will help you to
understand what needs to go into a good business plan. You can
read Timothy Berry's "Hurdle: the Book on Business Planning".

Use Business Planning Software

A good business planning software package will provide you with
an outline for a well-developed, objective-based and professional
business plan. Software packages will remove the problem of
starting from scratch by structuring your plan for you. The
software should ask you the right questions that will pull out
the most important underlying concepts within your business idea.
Find out more about the leading software package on the market, Business Plan Pro.

Business planning resources

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Build a solid marketing plan

The Essential Contents of a Marketing Plan

Excerpt from On Target: The Book on Marketing Plans by Tim Berry and Doug Wilson

Every marketing plan has to fit the needs and situation. Even so, there are standard components you just can't do without. A marketing plan should always have a situation analysis, marketing strategy, sales forecast, and expense budget.

• Situation Analysis: Normally this will include a market analysis, a SWOT analysis (strengths, weaknesses, opportunities, and threats), and a competitive analysis. The market analysis will include market forecast, segmentation, customer information, and market needs analysis.




• Marketing Strategy: This should include at least a mission statement, objectives, and focused strategy including market segment focus and product positioning.




• Sales Forecast: This would include enough detail to track sales month by month and follow up on plan-vs.-actual analysis. Normally a plan will also include specific sales by product, by region or market segment, by channels, by manager responsibilities, and other elements. The forecast alone is a bare minimum.




• Expense Budget: This ought to include enough detail to track expenses month by month and follow up on plan-vs.-actual analysis. Normally a plan will also include specific sales tactics, programs, management responsibilities, promotion, and other elements. The expense budget is a bare minimum.

Are They Enough?

These minimum requirements above are not the ideal, just the minimum. In most cases you'll begin a marketing plan with an Executive Summary, and you'll also follow those essentials just described with a review of organizational impact, risks and contingencies, and pending issues.

Include a Specific Action Plan

You should also remember that planning is about the results, not the plan itself. A marketing plan must be measured by the results it produces. The implementation of your plan is much more important than its brilliant ideas or massive market research. You can influence implementation by building a plan full of specific, measurable and concrete plans that can be tracked and followed up. Plan-vs.-actual analysis is critical to the eventual results, and you should build it into your plan.

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