A few months ago, I wrote an article about the importance of writing a business plan. My basic message was that for the small business owner, such a plan will greatly increase your chances of success, and to not have one is foolish. I was amazed at the positive feedback I received, as many of you were able to relate with one’s procrastination in writing a business plan. I received one particularly interesting e-mail from Mr. Malcolm Lauder from Boca Raton, who spent many years in a sales management role for an international company. “I read with a lot of interest your article about having a business plan. It was of course, right on the money. I wonder if, however, you might not have a follow up article that makes it easier for the small business owner to actually create a plan!” wrote Lauder, and was even nice enough to include some of his ideas.

So now that we know the importance of writing a business plan, how exactly do we go about creating one? The following are some paraphrased excerpts of Mr. Lauder’s e-mail: The very idea of a ‘business plan’ is uncomfortable for many, since it is based on future speculation. Entrepreneurs and natural sales people like things that they can get their teeth into. They are good with tactical stuff but have trouble with strategic planning.

Here’s a rather simple technique to help you write such an annual plan – sort of a “plan for planning:” Answer the following questions: 1. Where do we want to go? 2. How are we going to get there? 3. Who is going to help us get there? 4. How much will it cost? Any business owner can follow that outline. It forces him/her to answer with simple replies.

Let’s look at each question –
1. Where do we want to go? In other words, what is your annual goal, stated simply? Both in revenue (dollar amount) and in number of sales, or number of new accounts?

2. How are we going to get there? Increase advertising, get better sales and service training, add x-number of salespeople, etc. Get specific here – break your goal into monthly, and weekly ‘baby’ goals, which are much less intimidating than the big annual one.

3. Who is going to help us get there? Now the business owner can look at past performance and results and start writing a plan that says: interview and select an ad agency, identify and send people to training, identify and get rid of poor or non-performers and hire a combination of new, young and older, experienced salespeople.

4. How much will it cost? Now it is a lot easier for you to pull together your budget for the next year. Examine current expenses, cut where results have been disappointing, figure new people costs, etc.

The important thing about writing this plan is to keep it simple. It’s important that this be a document that you can pull out and review every month, to see if things are on track, or if maybe you should change track altogether if something isn’t working the way you hoped. My thanks to Mr. Malcolm Lauder for contributing to this article. Good luck with your planning!

Do you have a business plan? Most small businesses fail largely due to lack of proper planning. It seems rather obvious – imagine trying to build a house without a plan. How will you know if you’re on the right track while you’re building it? What will it look like when it’s done? To increase your chances of success, it is essential that you write a business plan which will include short and long term goals, as well as clear ways of tracking your results. Even if you’ve been in business for a number of years, it’s not too late.

There are, of course, business owners that do very well without ever having written a business plan. They basically fly by the seat of their pants, don’t know where they are going, but somehow business is good. Just because some businesses do well without planning does not make their method a prescription for success. Had these business owners implemented a well thought out plan, they would have been much more focused, organized, and no doubt even more profitable.

There are many good books out there that can help you with your business plan. These go into great detail about how to conduct market research, a statistical analysis of your target demographic’s buying habits, how to design pricing for your product or service, and much more.
Your business plan can be long and detailed, but it need not be. At the very least, it should include your goal for the year, a 5-year goal, and a marketing strategy to be implemented to meet these goals. It’s amazing how much focus and control you will gain over the direction of your business once you begin the process.

For example – “In 2005 XYZ company would like to add 1,000 new accounts and increase revenue by $200,000. To do so, we will do direct mail, telemarketing, and an extensive radio ad campaign.” This should be followed by details of how specifically this will be implemented, broken down into monthly and weekly mini-goals . Will sales people have to be hired? How many? How much will the direct mail and radio ads cost, and how much revenue should they generate? What is plan B if any aspect of your marketing plan fails? All of this should be included in your basic plan.

Most important of all, keep in mind that your business plan is not written in stone. Rather, it’s a living, breathing document which should be reviewed often and changed when necessary. If, during the course of the year you find that a particular goal is too high or too low, simply adjust it. If a marketing technique doesn’t work the way you hoped it would, change it or try something else. Rather than allowing luck to determine your success, YOU will be in control! Happy planning!