Business Plan Basics
Why do you need to write a business plan? A business plan is a way of thinking long term about your project, even if you don't plan on making it your business. You should think of it like a thesis where you prove that your plan will work and you're the one to make it happen. If you're using your business plan to apply for a loan, then you're trying to prove to people that constantly vet aspiring businesses that you have planned well enough to succeed. If you write it for yourself or for co-leaders, then it is an exercise in planning for the success of your project and to make sure that everyone is on the same page. Done well, this document is something you will refer back to for years to come. What is included? You should look at some successful business plans before starting to get a sense of their scope and contents. Check with your local SBA or business school for samples and templates. They vary somewhat in structure but the following are generally included, often broken into several sub-sections. Summary Always engage your reader with the broad strokes. This is the elevator speech of your plan and needs to briefly demonstrate your qualifications, the opportunity, your vision, and your preparation. Mission Statement The heart of the business plan is the Mission Statement. If you do no other part of this exercise, take the time to do this one. As a social organization that hopes to motivate and inspire generations of students, this difference is key. Without a mission statement, a group will tend to describe itself in terms of what it does "We're Sunnytown Karate, we teach a martial art called Cuong Nhu. Come join us, it's great!" If you determine a mission for your school you might describe yourself more like this "At Sunnytown Karate our mission is to make the world a better place by empowering every student. Come learn about Cuong Nhu with us!" Crafting the mission statement helps you stay focused on the "why" of what you are doing which can keep you centered in times of stress, clarify decisions that challenge your principles, and most importantly, translate your vision to everyone you meet. Qualifications Describe your education, experience, and background as it relates to the project. Why are you uniquely qualified to succeed? Why should people trust you with a loan, their safety, their children's safety, leadership of a community, their paycheck? Services and the Market Describe in detail what you'll offer. What is the group or business going to provide? Why is that needed? What is your competition? How are you going to be competitive? How will it last and grow instead of wither and fade? What research and statistics can you cite that are compelling (access to industry research can be expensive but your local SBA or business school will likely have free access to it and generally has a business school outreach to local groups that will get you access)? Get specific about class schedules, student to teacher ratios, testing, student tracking, fees, and any other details about how you will serve members/customers. Marketing (This probably deserves its own section outside of this document for us to catalog marketing strategies and ways to bring in students) How will people find out about your classes? Keep in mind that a marketing plan that continues to bring new people to your business is an ongoing effort that requires money and time. There are many strategies. Which ones are you going to allow time and budget for? Operations What space are you using? If don't already have an agreement, what are you looking for? How do you staff your business? How will it be managed? Who gets the mail, answers phones and emails, maintains the website and social media? Do you have an accountant? Do you have a mentor? This section will show your understanding of the day to day side of running an organization and help you breakdown every aspect. Goals What do you want to see happen with your business or project? Where will it be in five, ten, or twenty years? This exercise is just as important as planning what you're doing tomorrow because it will set your compass and give you measures of your success. If your goals ever change, you should re-write your business plan. Financial planning This section is spreadsheets and math. If you haven't done any accounting or business, take some time to familiarize yourself with these tools and how they're used. Income projection, Expense Projection, Profit and Loss, Balance Sheet, Cash Plan, Ratio Analysis. When getting our business loan, the bank wanted to see projections of these for the first three years. They judged my ability to make sound business decisions by comparing my predictions to real data from the past to see if they thought it matched up and if that meant making enough money to support the business, myself, and paying them back their money. If you are trying to get a loan a Business Plan is absolutely essential. Outside of the proposal process, though, the Business Plan is an amazing exercise in planning. It will force you to confront hidden difficulties, analyze your ideas for holes, find documented support for your assumptions, and clarify your vision into an actionable plan.