Only 19% of small business owners use business planning. And 19% of small businesses survive at the end of each year. Coincidence?
Business planning doesn't guarantee success. However, most people wouldn't think of building a house without a set of building plans. Without a building plan, it is doubtful your foundation would be adequate, you might forget key parts of the plumbing, and your kitchen might end up where your bathroom should be.
The same situation will happen if you don't create a business plan. While you might think that you can keep everything in your head, your results are likely to be disappointing.
The business plan process helps you think through all parts of your business, establish a solid foundation, and puts you in a position for business growth. The parts of the business plan that you can't do or are hard for you, are the areas where you need professional help. A plumber building his own house hires experts in roofing and other unknown areas. You need to approach your business the same way.
If you are planning a vacation, there are three steps. The strategic plan determines where you are going to go, the time of year, and who you will go with. The business plan determines how you will get there, how much money to bring, and a basic idea of what you will be doing. Finally, the operational plan determines all the actions you will do once you are there.
Business planning is the same. Just having a "good business idea" is not a strategic plan. You need to know the long term prosperity of your business and whether it is positioned correctly for the marketplace today and in the future.
Don't skip the steps. Research shows that strategic planning is the only form of planning that has a strong connection to financial performance. In other words, if your foundation isn't solid, the rest of the business can't thrive.
STRATEGIC PLAN: Consider putting your "good business idea" through a strategic planning process BEFORE anything else. Below is a free online class.
Creating a Strategic Plan
Developed by SCORE.
This free, online course shows you how to create a mission, visions, goals, and strategy for your business.
BUSINESS PLAN: Once you have a strong foundation, you are ready for the business plan. There are many sources of help to create business plans - online classes (free and low-cost), low-cost classes through the SBDC and SCORE, books and software.
Make sure that your business plan clearly supports your strategic plan. If it doesn't, go back and refine your business plan - or it is like building a house and not attaching it to its foundation. You can also take a class on business planning or get free assistance by using the links at the left.
Palo Alto software, maker of BusinessPlan Pro, provides sample business plans at http://www.bplans.com/samples/sba.cfm. They also provide biweekly classes to teach you about their software.
OPERATIONAL: Your operational plans are all the details you will need to do business: the forms you will need, the procedures, the sales process to follow, and more. Get a binder with dividers and write notes as you think of things. Also, supplement your operational plans by reading books about business and talking with others. Make sure your operational plans reflect your business plan. Usually that means to make sure your operational plans (expenses and revenue) stay within budget - but it can also help you prioritize your time.
You need to revisit your strategic plan every year; your business plan every quarter; and your operational plan every week.
The SBA provides business plan software for free. It is password-protected for your privacy.
Click here to go to the SBA's business plan software
US Bank offers a free Business Plan Workbook. Click here for the document.
SCORE also offers free templates for business plans:
SCORE (Service Corps of Retired Executives) templates
Sample business plans from referenceforbusiness.com:
The Small Business Development Center (SBDC) offers low cost workshops on business plans and steps for starting a business.
A SWOT analysis is a strategic planning tool for business. Your business should focus on your strengths and opportunities, and make plans to compensate for your weaknesses and threats.
SizeUp is a free service to help business owners make more informed decisions.
Traditionally, only large businesses have been able to afford acccess to advanced database services with competitive and industry data. SizeUp was developed to even the playing field - so that small businesses could have access to the same information.
Click here for a short video showing how you can use SizeUp to find a business location - by learning where your customers, competitors, and suppliers are located.Click here to go to SizeUp. Registration is free.
SCORE and TDBank/Visa provide free online workshops including:
How to do Market Research, Industry Research and Business Research
In your business plan, you will need to show that you understand the industry that you are entering (industry research), the size and characteristics of your market (customer market research), and your competitors (business research). Your local librarian can help you find information. You can also visit the business library of your local college or university.
In addition, most libraries now have access to online business databases for business research. You must have a library card to access them. Click here to visit your library's database resources.
Click here for research guides with Baruch College library for business research. This tutorial is from City College of New York, but includes sources that you can find at most libraries.
Statistics gathered by federal agencies https://nces.ed.gov/partners/fedstat.asp
Financial statistics for industries: BizStats http://www.bizstats.com
Sources of industry research from National SBDC Information Clearinghouse http://www.sbdcnet.org/
Industry information http://www.referenceforbusiness.com/
Researching Companies Online: A step-by-step tutorial for finding free company and industry information. http://www.learnwebskills.com/company/
More industry information http://valuationresources.com/IndustryReport.htm
SCORE has developed a series of videos to help businesses use technology to improve their business. Each video is about 30 minutes long. There is also a written text of the videos on the same website (click on How To Guides)