November 23, 2010
Brilliant Ideas Are Nothing Without a Plan
BY Mary Mahoney
Many of the entrepreneurs I know are energetic, wildly enthusiastic and – in their best moments – even brilliant. But organized and disciplined? Not so much. As dazzling as their ideas may be, it takes a well-reasoned, comprehensive (okay, perhaps somewhat boring) business plan to impress potential partners and financiers.
Your great idea is the door opener, but your strategic business plan is the deal-closer. Given that years of work and your potential payoff are riding in the balance, it pays to invest however much time and effort it may take to write a formal business plan that presents a compelling and convincing story.
First things first: Get your facts together, including supporting market research, legal matters (trademarks, patents, permits, approvals and the like), profit-and-loss projections, marketing ideas, SWOT, mission and vision statements, staffing requirements, company structure and investment needs– just for starters.
Next, decide whether your team has the internal expertise and experience to prepare a plan. If not, look for outside help. Even if you believe your team can do the job, you may wish to engage an independent consultant who can afford to be brutally honest bring a fresh perspective to your business.
Now brew a strong pot of coffee and get to work. Inc. magazine recommends that a basic business plan be structured into seven sections: 1) an executive summary, 2) company overview, 3) business offering, 4) marketing plan and analysis, 5) strategy and implementation, 6) financial projections and 7) management team.
Writing a succinct, focused executive summary is crucial because it will either hook your readers or lose them. “This section is key if you are seeking outside funding as it introduces possible investors to your business,” Inc. says, adding that experts suggest writing this section last, so that it incorporates thinking from the rest of the plan.
The company overview states your company’s mission, vision and objectives. The business offering describes your product or service. The marketing plan and analysis discusses how you will tell prospective customers about your product or service while overcoming obstacles to success, including existing competitors.
The strategy and implementation section essentially is a timetable that details how you intend to take your product or service to market. It shows what your company intends to accomplish by the day, week and month. Financial projections include projected profit and loss statements, balance sheet and cash flow.
The management team section features biographies of the senior leadership team. “For investors, it’s an important element to include who these people are and what their experience is,” said planning guru Tim Berry. “Investors need to evaluate risk, and the general assumption is that management team experience greatly affects risk.”
While the seven-part plan described above may work for many companies, it’s important to be flexible and be prepared to take a different approach based on the expectations of your company’s prospective investors and business partners. Other elements of a business plan can include:
- Values and guiding principles: What does your company stand for?
- Assumptions upon which the plan is based
- Anticipated operating budget
- Your company’s competitive advantage
- Target markets
- Tactics for implementing the strategy
- Implementation accountability by key executives
- Key staff job descriptions and reporting relationships
- Performance metrics and measurement tools
J. Robinson Group helps clients develop custom plans by listening and engaging with all key players. We advocate practical, easy-to-understand plans designed to resonate with our clients’ key audiences. We ensure that no important elements are omitted. Our clients say the experience clarifies their thinking and sharpens their resolve.
The approach of the new year signals an opportunity for company leaders to look in the mirror, assess their accomplishments and review and adjust their plans for the future. I’ll share my thoughts about this in an upcoming post.