Tips and Traps for Writing an Effective Business

Having an effective business plan is critical to the success of any business. That is why I want us to examine this text entitled “Tips & Traps for Writing an Effective Business Plan.” It is written by Greg Balanko-Dickson, a third-generation entrepreneur, Licensed Professional Business Coach and founding member of the Professional Business Coaches Alliance.

Balanko-Dickson has clients throughout Canada, the United States, South Africa and the United Kingdom. According to the author, whether you want to start a business or grow one, buy or sell one, attract investors or obtain a loan, fine-tune your operation or restructure it, attempting to do it without a well-crafted plan is like going to the sea without a compass. He says this text arms you with the know-how and tools you need to write your own surefire business plan in a record time.

Balanko-Dickson educates that to be successful in business, you need to research and write your plan; tailor a plan for virtually any type or size of business; master the 10 key components of a successful plan; understand all your financing options; and streamline the process using worksheets, sample forms and ready-to-use templates.

This text is divided into five parts of 27 chapters. Part one is generically christened “Introduction” and contains two chapters. Chapter one borders on what a business plan is and why you need it. According to Balanko-Dickson, it is an instrument used to document the intent and plans of the owner regarding every aspect of the business. He adds that the document itself can be used to communicate plans, strategies and tactics to your managers, partners and investors.

It is also used when you are applying for credit, educates the author, explaining that the plan contains both strategic and tactical objectives, and it can be either informal or formal.

He adds that a plan has an equation structure of Goals + Research+ Strategy. Balanko-Dickson says a goal only reveals your intent or where you expect to end up, but a formal plan details the exact formula you feel you need to put together to attain your primary goals.

He explains that his definition of a business plan is “a formal document written to capture and communicate the planned direction and manoeuvres required for the business to accomplish its most important goal – profitability”. Balanko-Dickson adds that profit is no accident, and by writing and following your plan, you increase the chances of achieving profitability.

Balanko-Dickson educates that developing a detailed plan will provide you with an opportunity to shape a powerful business development strategy, whether your goal is to: get financing to start; get financing to expand; be more organised and increase your odds of success; identify the value of your business and prepare a plan for selling; create a plan to buy a business; create a management succession plan to facilitate your retirement, etc.

The author identifies ten sections of a business plan as industry analysis; market analysis; products and services; business description; marketing strategy; operations and management; financial plan; implementation plan; contingency plan; and executive summary.

Chapter two is based on the subject matter of understanding the process and getting prepared. Here, Balanko-Dickson discloses that the benefits of writing a plan are often misunderstood. A plan will help you get the money you need when you are starting a business and will also help you make an existing one more effective, educates this author.

In part two having a general thematic focus of the ten sections of a plan and containing ten chapters, that is, chapters three to 12, Balanko-Dickson discusses concepts such as industry analysis; market analysis; products and services; business development; marketing and sales strategy; operations and management; pro forma financial plan; implementation plan; contingency and emergency plan; and executive summary.

Part three is based on writing a plan in 30 days and covers three chapters, that is, chapters 13 to 15. Chapter 13, like the whole part, focuses on writing a plan in 30 days. According to this expert here, make no mistake, writing a plan can be a time-consuming task as you are planning your business for the next three years, and you want to give it the attention it deserves. He says his personal experience in writing plans is that it can take him between 50 and 300 hours to finish.

Balanko-Dickson expatiates that the more familiar he is with the industry and market, the faster he can get the plan finished. He adds that if you are writing a plan for the first time, have never been in business before, or are new to the industry, plan to spend more time writing your plan.

He says you can easily minimise distractions in writing your plan by devoting time to writing your plan. The author stresses that if you are unable to get away from the business, choose a quiet period of the day to work on your plan. In chapters 14 and 15, this author discusses common mistakes in writing a plan and working with professional advisers.

Part four is based on the broad subject matter of special considerations for specific businesses and covers ten chapters, that is, chapters 16 to 25. Here, Balanko-Dickson beams his intellectual searchlight on concepts such as business planning for investors; planning for a retail business; planning for a manufacturing business; planning for wholesale distributors; planning for a service business; planning for consultants and professionals; planning for large and public companies, etc.

Part five, the last part, is generically labelled “Getting the money you need” and contains two chapters, that is, chapters 26 and 27. Chapter 26 is based on applying for a loan. According to Balanko-Dickson here, small business loans can be used for a variety of purposes. He says for example, a loan can help you buy a business, start a new one and expand an existing one. The author educates that you will deal directly with the bank’s loan officers.

“Make no mistake however, major small business loans are reviewed by loan committees. Typically, loan officers are not part of a loan committee….Understanding your role and the role of the loan officer and the loan committee will help guide you through the approval process. It is a team game, and, as they say, there is no ‘I’ in ‘team’,” asserts Balanko-Dickson.
In chapter 27, this expert discusses the concept of getting funding from investors, family and friends.

Stylistically, the language of this text is simple, yet standard. The presentation is unique. The text is embroidered with graphics to reinforce readers’ understanding and achieve visual amplification. Balanko-Dickson includes a “Tip and Trap” section typified by graphical thumb/hand manipulation in every chapter, where he injects additional information and guides readers.

However, the whole of part three is already summarised in chapter one, meaning that chapter one could have been harmonised with part three. Probably this author deliberately uses this style of repetition to ensure long memory on readers’ part.

On the whole, this text easily passes for a masterpiece on business development. It is highly recommended to all existing and prospective entrepreneurs. It is simply fantastic.

Develop Your Business Plan

bs2A business plan defines your whole business strategy, where to start with and where your business will lead you in future? To create a business plan you must know the details about the business you are going to start.

Why a Business Plan is required?

Before starting a business everyone needs to know where your company will stand in next 10 or 15 years that depends on you for how long you can carry on your business plan. After collecting all the necessary information regarding your business you have to assemble that in order which results in a proper business plan. The essence of your business plan is based on:

  • Goals: Define your goals properly and strategy to achieve them.
  • Problem & Solutions: What you are going to do in any sort of crisis? How you can handle it?
  • Financial Issues: How much finance you have? And how long you can survive with it? How are you going to manage you business profit and loss?

Business Plan Duration:

While writing a business plan you should keep that in mind, how long your business plan can survive? For that you have to do market research about the business you are going to start, it pros and cons. The success of your business can tell you how long your strategy will work?

Flexibility:

Your business plan must be flexible, if things doesn’t workout according to the plan than what will be your next step? Most of the people got stuck in the situation where they don’t have enough flexibility in there business plan. So your business plan must be flexible enough so that you can make changes according to the twist and turn in the market.

Web hosting Business Plan:

If you are planning to start a web hosting business first you have to define your business plan. Your business plan must have consists of following elements:

Define your Business Strategy:

Most people got confuse in the beginning that where to start off. If you are starting a web hosting business and you don’t have much idea about it started off with a small investment. Initially get a reseller web hosting plan. In reseller hosting plan you are allow to host websites as a third party. Certain amount of space is reserved on a server for reseller account and he has permission to rent it further on the behalf of his own company. A reseller can have a shared server or he can rent a dedicated server. Many known web hosting companies had started off as a reseller and now they are giants. So starting of as a reseller can turn out to be a huge company.

Market Analysis:

Before doing anything one should analyze the conditions or situations. So as in the business you have to analyze your market place and how things work in web hosting business. While performing a market analysis you have to keep these things in mind, what are you offering? Where you have to start? Why you choose this business? And how you will compete? Market analysis will clarify your targeted clients and competitor so you can define your web hosting plans keeping market trends in mind.

What are you going to Offer?

First you have to decide what sort of web hosting plans you can offer? There are many cheap web hosting companies offering cheap web hosting plans. What is your uniqueness? A Reseller can provide any type of hosting plan depending on what sort of account he is using himself? As a reseller host you can offer shared web hosting, Virtual Private Server (VPS) hosting plan and dedicated server hosting plan. Also you can define your own price and packages. To beat your competitors you can define many discount packages. Attract them with cheap offers or provide some additional services.

Marketing strategy:

Marketing is another important aspect of a business especially when you are new. Let the others know you are here. You have to promote your web hosting business, for that you can use ads, social media, affiliate marketing and other online resources. Marketing strategy must be defined clearly keep in mind your targeted clients and other related companies. A healthy marketing can boost up your business so your marketing campaign must offer attractive web hosting plans.

Financial Plan:

Most important aspect of any business is “finance.” What you going to invest in the business? How much financial resources you have? And how long you can survive with any output from your business? Market survey will help you to decide how much investment is required to set up web hosting business? Keeping in mind all the available financial resource you can define your business scale, whether you are going to start your business at small or large scale.

As if you are starting as a reseller host you don’t require much investment. In financial plan you have to keep record if incoming and outgoing cash so you can keep an eye on what you are earning? And how you have to spend it? Keeping in mind all these factors you can develop an efficient financial plan.

Operations and Management:

As in the beginning you are starting as a reseller host so you don’t have to worry about many operations. You hosting company will take care of your hardware maintenance and other complicated issues. Also they will provide you 24/7 customer support. In future when you move on to the bigger level, you will require more space and manpower to perform these operations. Depending on the growth of your business you have to define your needs in term of hardware, software and resources to maintain all this setup. List down all the operations you have to perform and how many people are required to perform these operations. In web hosting business you have to maintain your many different client accounts including there web hosting plan and services they are getting.

New to Business Planning

Why would you want to write a basic business plan as opposed to a more elaborate one? Most business owners I know struggle with the idea of writing a full-blown plan for their business. To be completely honest, writing a plan for anything, let alone a business you own or intend to start, is challenging because…

1. we don’t know where or how to start
2. we want our plan to be perfect the first time we write it – as in, we don’t want to make any mistakes
3. we don’t like to write – and let’s face it, writing a plan involves writing.

I’m going to share with you ways to overcome each of these hurdles. But before you do anything, allow yourself to break the process of business planning into small steps.

The first step is to have a basic plan which will serve as the foundation for a more detailed and comprehensive plan down the road.

How to Start Writing Your Plan

What goes into a basic plan? Well, let’s first define a basic plan as a plan for the bigger plan you will arrive at later on.

Here are the essential questions you need to answer:

1. What do you want to gain by writing this plan?

Is this plan an internal plan which you will use to guide yourself or your team towards achieving specific and measurable targets? Or are you aiming to attract potential investors? Is this something you would like to take to the bank to propose a loan for your business?

Begin by examining what your specific goal is for writing your plan.

2. Who is going to review my plan, and what do you want them to do with it?

You need to identify who is going to actually study your plan, and what they are going to do with it. If it’s yourself, then it’s a little easier to answer this question because the answer lies within you.

If, however, you are writing your plan for others to review, and assuming you’ve answered #1 above, you’re going to have to do some background analysis.

Start listing names or titles/positions of people who you expect to review your plan. Then, for each person, brainstorm how you want that person to react to your business plan – what they should do with it.

You could do the same thing for investors – do you know any business owners? Ask them what they would look for in any business venture they would invest, and specifically what they would look for if you wanted them to invest in your business.

3. What is the core product or service your business offers to buyers?

To answer this, write down the product or service you intend to offer as simply as possible. We’ll answer more detailed info about it in the following questions.

4. Who is the ideal customer for this product or service?

Really, ideas for business are a dime a dozen. You often hear people talk about a great business idea they have, but they rarely back it up with any kind of proof that a customer exists for such a product or service, and that that customer would be willing to pay.

Try to be specific in profiling your buyer. For example, does your product or service cater to men or women, or both? What age groups or income levels does it service/attract? Are there any geographical areas that your product or service would supply?

5. Is there enough demand for your product or service?

This is something you’ll want to investigate in more detail as you develop your business plan. At this point though, what’s important is to do some preliminary research. Searches on Google, Hoovers or Bizminer will help you study a particular industry, and you can often drill down your research to a particular state or city. Your search at Google is of course, free, but you’ll often find for a small investment at sites such as Hoovers or Bizminer, you’ll get meaningful data for your market vertical, which you can start analyzing right away.

It’s also not a bad idea to survey buyers on their purchase behaviors and perceptions towards your product or service. Arranging a questionnaire or focus group can give you some useful insight into how potential buyers react to your product or service.

If it’s reasonable, consider giving away product or service trials and then follow-up to evaluate user expectations and experiences.

If you don’t have demand for your product or service, it really doesn’t matter how great it is anyways, right?

6. What existing problems or needs does your product or service solve for your customers?

This is one of the most important questions to answer, because ultimately, your product or service is just another one available unless it clearly and uniquely solves a problem or need which buyers face.

To give an example, let’s say your product is a software application that helps you manage your finances and taxes. There are a few applications in the market which do that already. So, what does your application do that others don’t? Is it better on features, is it faster? Is it more secure? Is it more user-friendly? Is it more portable? Does it really help someone save money or increase their net worth?

Can you see why getting clear on the solution you offer to your target market is so crucial?

7. Who are your direct and indirect competitors?

You really should gain at least an initial understanding of who else is offering similar products or services to your target market. It’s good to know how their products or services are currently used and perceived – why people buy them, and why they don’t. In doing so, you begin to understand the strengths and weaknesses of your competitors from the consumer’s perspective.

Depending on what your product or service is, you can find all kinds of information about user experiences with your competitors’ offerings. Sites like Amazon let you see product reviews by customers who bought products.

8. What do you need to get your business rolling/growing, and what will it cost?

This is arguably the most painful part of business planning. Yet, what is the point of having a plan if you don’t know how it all adds up financially? You may not know how to put all the numbers together on your own. If that’s the case, invite or even hire someone to help you sort out the numbers.

Aside from any potential revenues earned from sales of your product or service, you’ll need to know your fixed expenses – what it costs you to run your business whether or not you sell a single item, and your variable expenses – what it costs you for each item sold.

Naturally, in the early stages of planning a business, you will be doing a lot of forecasting, and your numbers may not be as accurate as you’d like them to be. So, you’ll want to be as conservative as possible about how much revenue you’ll generate and how much your business will cost to run.

9. Putting your plan to action – what are the key steps you need to take?

At some point, the plan needs to hit the road! The plan is no good if it doesn’t help you take action. So a simple action plan should be included – what needs to be started and completed, when and who will do it, all need to be mapped out at least at a basic level.

Having an action plan will also help you get excited about your business venture, as you can see how it comes to life.

10. How can you improve your plan?

Once you’ve answered these questions, you have a basic blueprint of how your business is going to look at the early stage.

Remember, your first step is to prepare a basic business plan that serves as a foundation. From this foundation, you will want to further explore areas which need more analysis and testing, while some aspects of your business venture merely require you to get started and measure how things are going.

When You Need Business Plan Help

Writing a plan for your business is often a challenging experience, and finding business plan help isn’t very easy either. There are many more employees than there are entrepreneurs in the market place, and very few people with the skill and experience to write entrepreneurial plans which produce results. It’s no wonder people looking to start or grow a business have a tough time finding help in this area.

Don’t fret though – help does exist – you just need to do a little digging to find it. Of course everything depends on your needs and budget, so with those in mind, let’s look at the choices you have…

Enroll in a Entrepreneurial Planning Course

Now some of you may be rolling your eyes at this suggestion because you’d rather have someone else write the plan for you. In my opinion though – and it is a strong opinion – no other option can compare with creating your own plan. Even if you do end up hiring someone else to help you write your plan, consider taking a course in company planning so that you understand and can follow what that person is doing. More importantly, you can challenge them.

Several community colleges offer such courses, and you can find some online as well. I would stick to the college programs though, as they are typically taught by people with real-life experience in planning a business. Plus, you get the benefit of studying the process with classmates, and by taking an accredited course, are “forced” to complete assignments which get reviewed by your instructor. I’m not saying that the online courses aren’t great – some of them are. But if you lack knowledge and experience in company planning, you’ll be much more motivated in a class environment.

Visit your Local SBA Office

If you’re in the USA, you have a great resource in Small Business Administration (SBA). This is a non-profit agency with the aim of providing assistance and guidance to entrepreneurs seeking to start new business. Aside from having useful guides and resources on writing an entrepreneurial plan on the SBA site (sba.gov), you can also seek business plan help from a mentor or counselor through your local SBA office. You’ll find detailed instructions on how to find a mentor or counselor, and if you belong to a minority group or are a female entrepreneur, SBA has several programs specifically designed for minorities.

Beyond the help you’ll get for planning your business, know that SBA is also a great resource for learning about various government loan programs available to small businesses.

If you’re not in the USA (e.g., UK, Canada or Australia), there are similar government agencies and programs designed to encourage small business owners. A little bit of research into these will take you a long way to getting smart about planning your business.

Buy Books on How to Write an Entrepreneurs Plan

OK. This is easy to do, but not as easy as it sounds. Thing is, there are so many books available on the subject, but so many of them give “template” sounding advice. One book I will recommend buying and reading is Bankable Business Plans by Edward G. Rogoff. This is one book I can confidently endorse because the author is no-nonsense about the realities of planning for a company and the truth about getting a small business funded. I’m sure there are other fantastic books out there. If you trust me, I would suggest starting with this one. You’ll get smart real fast.

Hire a Consultant or Writer

If you are clear about your business goals, or at least you are sure you will take charge in establishing them, then hiring a consultant or writer is an option to consider. This option is really recommended if what you need is someone who has the talent to put your thoughts onto paper more elegantly than you could, or someone who can challenge your ideas to get you thinking outside the box.

Having said that, it is a more expensive option, and can be really expensive down the road, not merely because of the fees you pay this person. Many individuals would prefer to “buy” a company plan that someone has written for them. Truth is, no one can really understand your business as intimately as you do, unless they are a part of your organization and play a key role in it.ad

So consider this option only if you have the knowledge to create a plan for your company but actually need business plan help to get your plan organized and written persuasively. And only consider it if you can afford it.

A search on the web for writers or consultants specialized in entrepreneurial plan writing will find you some options. You can also find help on freelance sites like elance.com. Make sure you do your research and selection carefully.