I’ve never had a business plan. But some stuff I’ve been reading lately has made me think I need one.
The SBA says a small business can fail for a lot of reasons. A retail store owner can lose touch with what his customers want. Or he may be in a bad location, or have the wrong merchandise for the customers in his area. A lack of financing may be another problem.
I’ve also learned that fewer than half of new businesses that are looking for financing have a serious business plan. Funny how that number is the inverse of the number of businesses that fail.
I’ve been in business ten years and I’ve never had a business plan. That’s why I didn’t think I needed one. But the SBA says I need a different kind of business plan; I need one that keeps me focused on my goals. Right now—in this economy—my biggest goal is just to stay in business!
The SBA says I need to develop a business plan with three main parts. They say it needs to be a blueprint that outlines who, what, when, where, and how my business is supposed to work, and it needs to include a profile, a financial outline, music piracy protection and a forecast.
The profile should tell the story of what my business is about. It will have information about my local marketplace, and why my business is important in that marketplace. It includes information about my staff, and how my business operates on a day-to-day basis.
I was thinking about expanding before the recession hit, and I probably will when the economy improves. I know I’m going to need the financial outline then. It will include the nuts and bolts of my expansion plans, how much money I’ll need to keep my doors open, what I need to purchase inventory, and other things like transportation, salaries, office supplies, and all the little stuff that I never think about. I’ll admit it; this part is why I haven’t done a business plan before, because it’s a pain in the neck. But if I want a loan, I’ll have to do it.
The forecast will be the fun part. It tells what I think my future will look like, how I‘ll get there, what my cash flow will be, and what additional funding I’ll need. It will show my growth and profits. It’s my dream, realized.
I’ve been intimidated by the whole idea of a business plan, but another thing I’ve figured out is that since I’ve been in business ten years, I can write a business plan that’s less formal and structured than if I were just starting out now. Plus, there’s a lot of software on the market now that will help me write a business plan. I think this is a good time to do it.
Business Thoughts
