Formal Business Plan
Components of a Formal Business Plan
- Vision and Mission
- Strategies - Marketing, Management, Operations, Competitive, Financial
- Action Plan
- Operating Budget
- For what purpose does this business exist?
- What passion has pushed me in this direction?
- What beliefs do I hold that support this venture?
- What values will be exhibited in the company?
- What will the business do to help myself and others?
- What will it look like when it's "right" for me?
- The vision compressed into a couple of sentences.
- Define the need
- Quantify the need
- Is this a good business or just a good idea?
- How is that need being filled now?
- What is my opportunity?
- How big is the window?
- Will it lead to other opportunities?
- How easy a business is it to get into?
- Is it a service/product that I can stay enthusiastic about?
- What image do I need to develop in my written materials?
- How much annual income do I need to earn to live?
- What is my alternate source for the first year?
- What are my start-up costs?
- Does success depend on external financing?
- Where will I find that financing?
- Have I registered for GST? PST? Company name?
- How am I going to keep good financial records?
- What is the best legal structure for my business?
- When do I need and how do I choose an accountant and lawyer?
- What is my cash flow telling me?
- Receivables/payables management
Expenses always come sooner and are larger than expected. Revenues always come later and are smaller than expected.
- Who is the boss? Who will do what? Am I good at delegating?
- Will I hire employees or contract out work?
- What human resource policies do I need to be aware of?
- Can I develop results-oriented job descriptions?
- What checks and balances have I put in place?
- How will I manage my time?
- Location/space - what does my client expect?
- Technology requirements
- Do I need and how do I get an advisory board?
- Tactics used to accomplish each strategy - detail
- Provides a date and an individual responsible for each action
- Includes a review schedule so the plan doesn’t wander
- How will I cope with it all?
Developing an Operating Budget
- Gathering the various costs
- Building a spreadsheet
- Tracking actual against budget
- Be realistic about what you can expect
- Translate into a cash flow
- Begin! Just do it!
- Try to spend the bulk of your time doing what you do best
- Review your goals twice a week and always first thing on Monday morning
- Dream big but abandon perfectionism
- Know where your weaknesses and blind spots are
- Hire to your weaknesses, not your strengths
- Speak positively always and you will begin to believe what you hear
- Always work with the best people - let them push you to greatness
- Network, network, network
- Always have your business cards with you
- Take a moment regularly to enjoy your progress!
What's in it for me?
- Is this a business or a hobby? It's a business if it provides you with a living income, the prospect of selling it for real money, and the capacity to build a retirement fund.
- What plans have you in place to provide for your financial independence?
- Are you educating yourself about how much money you will need to support yourself when you retire? The earlier you start, the better.