The one who adapts his policy to the times prospers, and likewise the one whose policy clashes with the demands of the times does not. ~ Niccolo Machiavelli
As with any process or project, a business plan comes with pros and cons. This section summarizes some do’s and don’ts of an effective plan. In the course of writing yours, and revisiting it 6-12 months later, you’ll be able to observe your own highlights and caveats. Each business is unique and will present different issues to work through.
Do’s
1. Be proactive in defining and anticipating your business needs, and the time spent in attending to each specific task or activity.
Here’s an example cited by the SBA (Small Business Administration):
“It may seem silly to ask yourself, ‘What business am I really in?’ but some owner/managers have gone broke because they never answered that question. One watch storeowner realized that most of his time was spent repairing watches, while most of his money was spent selling them. He finally decided he was in the repair business and discontinued the sales operations. His profits improved dramatically.”
2. Do think about what products and services will benefit your customers.
3. Do think about how you will reach customers, and how they can reach you.
4. Do select a business name that communicates your company’s image, products and services. (Running businesses have changed names to clarify their marketing image, too.) Choose one that makes you instantly recognizable and understandable to the public.
5. Do think about how you’ll finance your company. (Hint: Banks are more likely to offer you a loan and/or credit line when you’re the major financier of your business.)
6. Do learn to think like a banker. Write down what this person would want to see in a business plan. Arrange data in an order that makes it easy for them to find the information. Bankers are methodical and logical in their approach. So should every successful business owner.
7. Do revisit business goals periodically to measure successful milestones, and for the inspiration to acknowledge the progress you’ve made. It’s also realistic to admit limitations and the need to rethink smarter ways of using limited resources.
Don’ts
1. Don’t forget to emphasize benefits for your customers, not features.
2. Don’t guestimate and assume figures when forecasting projections. Be as precise as you can. Solid figures will come out ahead for you in the event of emergencies—of which there are plenty in every aspect of running a company.
3. Don’t skip getting essentials such as business insurance coverage for equipment and employees. Insurance is a major component of every business plan to protect you from property losses or damages.
4. Don’t forget to add on a 15-20 percent contingency allowance for your budget. This way, you’ll be covered at least partially in the event of an emergency.
5. Don’t forget to have proof to back up claims that you make in your projections. Show clearly what you intend to achieve, and how you’ll deliver outcomes.
6. Don’t forget to ask your banker to review your business plan prior to submitting it to him or her for a loan application. This person’s advice is priceless, and free.
Or, pay an accountant to review your business plan. Alternatively, outsource this project to an expert, which will be discussed in Part 8.
7. Don’t be so enamored with your business that you can’t detach from realistic expectations and outcomes. Don’t hype your company out of proportion.
Next Part 6:
How to Write a Business Plan
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