Business Planning Part 1
December 6, 2004
Building a Business Plan
By: John Klesaris
John Klesaris here from the PHCC 495 North Chapter (Massachusetts). Have you ever seen a contractor try to 'rough in' a commercial building without a set of plans? Or how about a multi-unit apartment building? I know I sure wouldn't. Working without plans is like flying an airplane with no windows! But you know, contractors are doing just that everyday when planning the future of their businesses.
Lack of business planning is one of the major causes of business failures today. As the old saying goes, 'failure to plan is a plan to fail.' In the contracting world, most contractors haven't even heard of a business plan, much less attempted one. But then again, the same is true for small businesses in a variety of professions. So what's the big deal?
It IS A Big Deal!
Most people write a business plan so they can obtain financing to expand their company, or in preparation to put it up for sale. While these are sensible reasons for doing it, there is a much more important reason. Something fundamental in nature. Something so simple, so obvious, it should hit you SMACK between the eyes.
You should write a business plan so that you know where you are going!!!
'That's crazy,' you say. 'I'm just trying to make a living. What do I need a PLAN for?'
I'll tell you. A business plan is so much more than a list of goals. It's more than a projection of sales. Properly done, it's a map, in fact a blueprint, for your company's success. And the lack of one is why so many owners have to work so hard. It's like playing a defensive game, instead of an offensive one. Reactive instead of proactive. Just look at the Patriots!
There are a lot of resources to help you accomplish your plan, many of them free (see the Links at the end of this article.) Agencies like the SBA and S.C.O.R.E. offer help to business owners like us everyday.
You may also purchase software designed to help you write business plans, but be wary. It's OK to use software, but don't let the software do the thinking for you. Make sure you do the research on the information you are plugging in to the program.
Down To Business
So what is it, exactly? First off, don't get the idea that you will get this done in few hours, or even a weekend. It's just not going to happen, if you want to do it right. Plan on spending at least two or three months putting it together and refining it. Set aside couple of hours every few days to work on it, and keep all your materials in a folder. It is a project, but one that will pay you dividends far greater than you can imagine. Cutting corners will only short circuit the process, and your plan will be lackluster at best.
A properly written business plan begins with an honest, usually painful assessment of your company. And ironically, this is where most plans are doomed before they are begun, because the owner either glazes over the truth or can't face it at all. The result is a plan that is faulty or worse, no plan at all. This is the hardest hurdle to overcome, getting it started. It takes patience and guts, and a commitment to growth.
You'll begin with a snapshot of your company and its condition. Financial information, market share, strengths and weaknesses all need to be examined. You will consult with your accountant, and maybe your banker. You will examine the marketplace and how you fit into it. You will study your competitors, and where they fit in.
It sounds complicated, but it's really not. Much of the information is readily available, either online or at the library. You just have to set aside those two hours each time you work on it, so you won't be interrupted.
Here We Are - Now Where Do We Go?
OK, so now you have your information compiled. You know exactly where your company stands, financially, your market share and capabilities. You know where the competition stands, and how you differ from each other. You know your strengths and your weaknesses.
You are now ARMED with the information you need to plan your company's success! This is most of the battle, just knowing where you are.
In the next article, we'll take a look where you are going...
495 North PHCC
Copyright 2003 by John Klesaris
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