Your Business Plan

Write lists and goals of things you want to do. Write a business plan for your business. Investigate the Small Business Administration website and use their training materials to help you learn about writing a business plan for your free enterprise.

You’ll probably be working on your business, long before you start organizing your thoughts and plans into a formal business plan. That’s okay. Create a spreadsheet and get in the habit of recording any money you spend on your business, and any income you earn from the business.

How will your business earn income? How will you close the sale? What are you selling? What kind of system are you going to use to get paid? What are you going to do about trademarks, patents, security and insurance?

Spend time thinking about how you are going to make money in your holistic home office. Not because that is the most important thing, but because it is a vital aspect of your business. Your free enterprise needs to be profitable, in order to be sustainable.

Writing your Business Plan

The most important reason for writing a business plan is to help you visualize your plan in your own mind and to take control of your own free enterprise. It’s a way for you to use your executive decision making cortex to manage your creativity and productivity.

Reading your business plan will train your subconscious mind to work towards the goals you describe in your business plan. Business planning is a psychological process as much as it is a sociological, financial or economic process.

Your instincts and emotions cause your activity. Use your conscious mind to guide your subconscious mind, your instincts and emotions. Your business plan is a map you can use to lead yourself, to help you set your schedule and plan your activities and make sure your free enterprise is profitable, instead of aimlessly floundering around.

Your business plan is a living document that you will update on a regular basis. You can also use your business plan to explain to other people, such as your business associates, bankers, investors and customers, etc, what you are doing and how you are doing it.

Explain who you are and what products or services your business supplies. What needs do they fulfill? Who are your customers? Why would they trade with you? How will you reach your customers? Where will you get capital to work with?

What is your most wanted response? In other words, what do you want your customers to do on your website? Pay attention to your customers wants and needs and then design your website to lead them to your most wanted response.

Focus on your customers and their wants and needs and how your products and services fulfill those wants and needs. Your customer’s wants are even more important than their needs. Your customers decide what they want and need, you just show them how you can fulfill their wants and needs, better than anyone else.

Defend your own self-determination by respecting your customer’s self-determination. Make sure you serve your customers, rather than control or manipulate them. Make sure everyone you trade with gets a good deal.

Filter your prospects. If they don’t want or need what you are offering, then move on to the next prospect. Focus your attention on fulfilling your customer’s wants and needs very well, solving their problems, rather than trying to get people to fulfill your needs by buying what you are selling.

A typical business plan includes:

• Table of Contents
• Executive Summary
• Business Description and Vision
• Definition of the Market
• Description of Products and Services
• Organization and Management
• Marketing and Sales Strategy
• Financial Management
• Appendices

Executive Summary

Your Executive Summary should explain who you are, what you do and why. It should be less than 2 pages long and while it is usually the first section of your business plan, it should be written last, after you’ve explained all the details of your plan.

This is the most important, first impression of your story. Make it a good story. Write your executive summary last, so all the details of your plan will be fresh in your mind while you are writing it.

Business Description

Your Business Description and Vision should include your mission statement. Describe your specific business goals for a specified period of time. Your goals should be specific and realistic.

Your Mission Statement is a brief statement about the purpose of your company. Your Vision is an inspiring expression of hope for the future of the company.

Include background information about the company and list the owners and other principals involved in the company. Explain who founded the company. How, when and why was the company founded and how has it evolved.

Market Definition

Describe the industry you operate in, as well as the potential for your company within that industry. Demonstrate your knowledge of the industry. Describe the market for your products and services and your potential for attracting customers within that market.

Describe your customer’s needs, including how well they are or are not, already being met. Why will your customers buy your products and services? What needs are you fulfilling? What problems are you solving?

Identify your target market and profile your customers. Who are your current and prospective customers? What do they buy and why? What kind of people are more likely to buy your products and services?

Target marketing and market segments are the processes of identifying groups or classes of people that have similar wants, needs and actions. Defining these market segments enables you to design marketing campaigns that will appeal to your target market. Investigate and explain the size and demographics of your market.

Product Description

Describe the products and services you are providing. Explain your pricing. Explain how your products and services compete in your target market. Explain why you are in business? What do you sell and how do you compete?

Pay particular attention to the benefits your products provide. Describe the holes that your drill can produce, not just the features of the drill.

Organization and Management

Explain the legal definitions of your company. Is it a sole proprietorship, partnership or corporation? Why? How is the company managed? Describe the leadership.

• Describe the process of producing or acquiring your products and providing your services. How are your sales generated?
• Describe any licenses or permits you have or need.
• Give a brief biography of the key people involved in the company.

Sales and Marketing Strategy

Marketing is investigating your target market and getting their attention. Sales is selling your products and services to the people your marketing activities have attracted.

Marketing starts with research. Answer the questions:

• Who are your customers?
• What kind of people are they?
• Where do they live?
• Can and will they buy your products and services?
• Are you supplying products and services that your potential customers want or need at the right place, time and price?
• How does your business compare to your competition?

Marketing research is a science. Work on learning what your target market wants and needs and how you can provide for those needs or solve those problems. Systematically gather information about the facts, opinions and desires of your target market.

A good marketing strategy will identify market segments, where you can serve your customers better than anyone else. Your strategy will help you select and refine your product offering, pricing, distribution, promotional efforts and services provided for your target market. Your marketing strategy will even help you determine who your target market is.

Be mindful of any changes in your customers wants and needs, and in the economy. Be alert to opportunities and dangers that are emerging. Assess how successful you are and how successful your competitors are. Be prepared to ride the waves of prosperity and endure any recessions.

Look for people who want what you’re offering and get really good at solving their problems or satisfying their desires. Show people how your products or services can solve their problem or fulfill their wishes.

Set the right price for your product in your market segment. Sometimes, for example, when you’re involved in network marketing, you will not have any control over the price of your products. You will still want to write a detailed business plan that includes some discussion of the price of your products and services.

Describe how you communicate with your customers and how you deliver your products and services. Develop a well-balanced strategy based on your products, prices, promotions and places.

Financial Management

The financial management section of your plan will explain your revenue projections, how much money you have and need and how and when you expect to make a profit. Your financial management is usually described in three financial statements: your balance statement, your income statement and your cash-flow statement.

Your balance statement and income statement measure and illustrate the financial performance of your business, by describing six elements and their interrelationships with each other:

• revenue
• expenses
• profits or losses
• assets
• liabilities
• net worth

Your cash flow statement is a monthly description of where your income is coming from and going to.

Your balance statement is your assets, minus your liabilities, and equals your net worth. Equity is the difference between your assets and liabilities. It measures your business’ value at a particular time.

Your income statement describes how your business has performed during a specific period of time, such as six months or one year. It lists all income and all expenses and calculates the profit or loss for the time period.

Your cash flow statement records the flow of cash through your business, typically on a monthly basis. It helps you determine how much cash you have available.

The financial management section of your plan should include your expected start-up costs, a projected balance statement, income statement and cash flow statement. They should all project one year ahead.

If you already have a business, your plan should include current and prior balance sheets and income statements for the last three years if possible. Include a current 12-month cash flow statement that projects at least 3 months into the future.

If you’re planning on using your business plan as part of an application for a bank loan, then include personal financial statements on all the company principals, ie., the main people involved in the company. Include a copy of your business or individual federal tax returns for the prior year.

Appendices

The appendix of your plan should help define your business and highlight your accomplishments by including resumes, pictures, brochures and other important information to further describe your company and clarify your business plan.

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Photo by TLFurrer, iStock
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