Rob Warlow on Why You Don’t Want to Write a Business Plan

We’ve told you what you should put in your business plan and what you shouldn’t put in your business plan. However, we haven’t mentioned one very important thing yet – why you might not want to write a business plan.

Rob Warlow of Business Loan Services discusses three reasons that business owners give him not to write their own business plans in this video. He also offers some motivation, if any of these reasons sound familiar to you.

  • I don’t have the time”: Simply put, you do have the time, says Warlow. You’re just putting it off. Once you understand the benefits of having a business plan, you’ll want to do write it up and, thus, want to set aside time to write it. (Or you can let someone else write it… like, say, Sierra Investment Group, Inc)
  • “I don’t know what to include in it”: Maybe you don’t know what to put in your business plan now. However, says Warlow, there’s plenty of books and free Internet resources that you can turn to. We recommend the Small Business Administration’s business writing resource as a good starting point. Warlow adds that you don’t have to put that much into a business plan: “Business plans do not have to be complicated. They don’t have to be the size of War and Peace. A good business plan, and a workable business plan for you, can sometimes only run to 10, 15, 20 pages at maximum. It does not have to be a complicated process.”
  • “It will uncover risks I’d rather not think about”: This is more of a psychological hurdle, according to Warlow. After all, if you put your ideas down on paper – the ideas that you’ve dreamed about and obsessed over – you’re going to have to face some glaring shortcomings in them. That can bruise your ego. However, revealing these shortcomings is one of reasons why you should write a business plan. You want to identify risks, vulnerabilities and weaknesses before it’s too late, says Warlow. That way, you can do something about them. Press through and confront the flaws in your ideas, says Warlow. Your business will be stronger for it.

Sierra Investment Group Inc. Carson City Nevada is a small business plan writing service and small business funding resource. They can be reached toll-free at (800) 323-6298 from 8 a.m. to 4 p.m., Monday through Friday, or at info@sierraig.com

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Tim Berry on How to Use a Business Plan to Increase Sales

You need more sales. I don’t care what your business is or how well it’s doing; you need more sales. But how to get them? Tim Berry, president of Palo Alto Software and author of several books on business plans, has posted an article over at Entrepreneur.com on how to use your business plan to increase sales and attract new customers.

Remember, a business plan is a tool both for setting goals and measuring progress. Berry has four suggestions for using these features to increase your sales.

  1. Use your business plan to sell more to existing customers. If you come up with a promotion, put its milestones into your business plan, complete with start and end dates and person in charge. That way, you’ll be able to plan for and around your promotions and include them in your forecasts, as well as have a way for tracking their progress.
  2. Use your business plan to set your pricing. If you base your business plan on selling high-end items, then you may not want to price your merchandise too low. Low prices may connote low quality. Review your business plan and your strategies to help you determine the right prices for your products and services, then set milestones in your plan for delivering on your promises.
  3. Use your business plan to review your marketing campaign. Figure out some way to measure the effectiveness of your marketing campaign, such as responses, ads, Facebook friends or Likes, retweets and Web site visitors, then put that into your plan. This will help you make plans to meet your marketing goals, as well as a way to measure if you’re on track to meet them.
  4. Use your business plan to expand into new markets. Make sure to add any strategies to expand your market or customer base into your business plan, as well as goals, measurements and tracking. That way, you’ll be able to see if your strategies are successful, or if you need to make adjustments.

A Better Business Plan Can Lead to New Customers

Sierra Investment Group Inc. Carson City Nevada is a small business plan writing service and small business funding resource. They can be reached toll-free at (800) 323-6298 from 8 a.m. to 4 p.m., Monday through Friday, or at info@sierraig.com

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Ron Place on Your Business Plan’s Statement of Purpose

So, you have your numbers, your research, everything you need to write your business plan.

Now, how are you going to use your business plan?

This excellent post at Business Plan Local discusses one part of your business plan that you may have overlooked, but that may help you tie everything together – the Statement of Purpose.

According to this post, “By starting with goals and working backwards, writing a plan to achieve said goals will make your writing process go much faster.”

Okay, that’s great. So what exactly is a statement of purpose?

Your Statement of Purpose should only be a few sentences and should articulate on “why I am writing this plan.”  Please note this is not “why I’m starting a business!”

Reasons to write a plan are applying for a bank loan, attracting a partner or investor, satisfying requirements of a property owner, or simply a good roadmap for yourself.

It should state the reason, how much money you’re looking for, the immediate goal (i.e. to open a storefront), and a one-year goal (i.e. $60,000 in sales or 150 customers/mo).

Hopefully, a Statement of Purpose will help you figure out why you’re writing a business plan and write it faster.

How a Statement of Purpose Can Save Time Writing a Business Plan for Your Local Business

Sierra Investment Group Inc. Carson City Nevada is a small business plan writing service and small business funding resource. They can be reached toll-free at (800) 323-6298 from 8 a.m. to 4 p.m., Monday through Friday, or at info@sierraig.com

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Dr. Steven Gedeon on Big Useless Numbers

In this excellent short video, Dr. Seven Gedeon, PhD, MBA at Ryerson University’s Ted Rogers School of Management addresses a common problem in business plans - what he calls “big useless numbers”:

… People want to understand your go-to-market strategy. What they don’t want to see – which I see students make this mistake all the time – are big useless numbers: “Oh, the market is a bazillion gazillion dollars, and all we need is one percent of it!”

There are four problems with basing your business plan around market share in this way:

  1. Most companies are lucky if they get even one percent market share, no matter how big the market is.
  2. Market share doesn’t tell your investors what they want to know. They’re less interested in the market share you have to capture and more interested in how you’re going to capture it.
  3. Market share doesn’t tell you what you need to know, either. Market share is a goal. Like your investors, you need to know how to achieve that goal.
  4. Your product or service may not appeal to everyone in your target market. It may only appeal to a niche market or to a smaller market than you think.

Gedeon recommends working with your addressable market size, instead.

So it’s not so much that the health care industry is a trillion dollar industry. It’s more important to say that my product, the number of people that are capable of buying my product at my price point may only be 200 million dollars, but that’s a real 200 million dollars. I’m not nearly as interested in a hundred fifty gazillion dollar market because that tells me nothing about how big YOUR market really is.

Sierra Investment Group Inc. Carson City Nevada is a small business plan writing service and small business funding resource. They can be reached toll-free at (800) 323-6298 from 8 a.m. to 4 p.m., Monday through Friday, or at info@sierraig.com

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Dave Thomas on Reviewing Your Business Plan for 2012

A new year means a new start, not to mention an excuse to review your business plan.

We recommend periodic reviews of your business plan because they can tell you whether you need to update your plan to reflect changes in your company. They also warn you if your business has deviated from your business plan, as well as give you clues to get back on track.

And, hey, the new year’s as good an excuse as any for a review, so why not?

Author Dave Thomas has several tips for your review on the Up and Running blog over at Bplans.

  1. Review your original goals – Ask yourself why you got into this business in the first place and if your customers’ needs and your own financial goals are being met. If you’ve deviated from your original idea, or if your expectations, or your customers’, aren’t being met, figure out how you’ll fix the problem.
  2. Determine if you abandoned your original plan – Ask yourself if your business and your original business plan have parted ways. Review how and where you got off course and what you can do to head in the right direction again.
  3. Determine if guesswork has taken over your business – Make sure you use accurate and up-to-date information when reviewing your business plan. Take economic forecasts into account, so you can plan for changes instead of react to them.
  4. Remember your investors – Make sure you keep your investors informed of whether your business is meeting your plan’s forecasts. Be prepared to answer their questions. Above all, don’t try to get the answers to your problems from your investors. That’s why they invested their money in you, instead of using it for their own purposes.
  5. Don’t overextend yourself – Take it slow, even if your business has gotten off to a great start. Make sure you’ve stuck to your plan’s timeline and are growing at a moderate, or at least sustainable, pace. Otherwise, you’ll grow too quickly, hire too many employees and pay for it down the road.
  6. Bring in help – Make sure you have a qualified outsider looking over your shoulder during your review. That way, you’ll get an unbiased review of your business plan, not to mention another pair of eyes to catch any mistakes that you might make.

Do You Really Require a New Business Plan Going Into 2012?

Sierra Investment Group Inc. Carson City Nevada is a small business plan writing service and small business funding resource. They can be reached toll-free at (800) 323-6298 from 8 a.m. to 4 p.m., Monday through Friday, or at info@sierraig.com

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Meredith Bell on Using Victory Logs to Build Self-Esteem

You should never turn off your self-critic, but there are times when you need to turn its volume down.

According to business coach Meredith Bell’s blog Your Voice of Encouragement, too much self-criticim can kill your self-esteem.

If you’re like me, you have this inner critic that’s constantly chattering in the background during the course of a day. It criticizes what you’ve done or haven’t done, it finds fault with the way you look and it judges what kind of parent or spouse, friend, family member or co-worker that you are.

I can back her up on that. Constantly fighting yourself can kill your motivation, your performance at work and your energy levels, not mention your happiness. What’s worse, the dreary days of winter only exacerbate these  feelings of worthlessness.

Finding a way to  “turn the tables on this negative self talk and focus it instead on what you’ve accomplished,” as Bell puts it, is important. “It would make a huge difference in the way you see yourself, what you ended up trying in different parts of your life and, eventually, the results that you get,” she adds.

Luckily, Bell has just what the doctor ordered  - writing a “victory log”.

A victory log is nothing more than a list 50 accomplishments that you’re proud of. The sizes of these accomplishments doesn’t matter here, advises Bell. “They don’t have to be things where you come out as the hero, they don’t have to be really huge things, but they’re things that, when you think about them, you feel happy and proud of what you’ve done.”

The key to this list of accomplishments  is to review it at least twice a day to help counteract negative self-talk. It sounds simple but, according to Bell, it works:

Did you know that this process alone – creating a victory list and then reading it twice a day – has been shown to increase self-esteem more than any other activity? Think about that. If you’ll take time to make this list, it can have a huge impact
on the way you see yourself and the way you live your life.

I’m not one for fast and easy fixes. That being said, I’ve tried writing a victory log, as well as a daily version listing my accomplishments for the day, and they both work. They may not fix your problems, but they do fix the symptoms so that you have the energy to work on the problems.  Both the video and the blog post are worth your time.

Use a Victory Log to Build Self-Esteem

Sierra Investment Group Inc. Carson City Nevada is a small business plan writing service and small business funding resource. They can be reached toll-free at (800) 323-6298 from 8 a.m. to 4 p.m., Monday through Friday, or at info@sierraig.com

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Entrepreneur’s Free (or Almost Free) Business Tools for 2012

You want to start a business, and money’s tight. You need all the help you can get, but more importantly you need it cheap.

If that sounds like you, then you need to check out this article by Entrepreneur‘s Catherine Clifford. She’s rounded up a list of free (or almost free) articles, calculators, Webinars, search engines and other resources that you can use to start 2012 on the right foot and without burning a hole in your pocket.

Resources are available in this article for:

  • Finding the right business concept
  • Writing business plans
  • Getting a business mentor
  • Hiring employees
  • Finding funding and investors
  • Developing a marketing plan
  • Optimizing your Web site
  • Calculating ROI for e-mail campaigns and pay-per-click ads
  • Choosing credit card processors
  • Making sales
  • … and more

A Complete Resource Guide to Start a Business in 2012

Sierra Investment Group Inc. Carson City Nevada is a small business plan writing service and small business funding resource. They can be reached toll-free at (800) 323-6298 from 8 a.m. to 4 p.m., Monday through Friday, or at info@sierraig.com

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Rob Place on What You Need to Do BEFORE You Write Your Business Plan

We’ve given you a lot of advice on what to do and what not to do when writing your business plan. However, we really haven’t touched on what you should do before you write your business plan.

According to Rob Place at Business Plan Local, you need to ask yourself  three things before you ever set pen to paper on your business plan:  “You need to know if you can do this, why you want to do it and how you’re going to pull it off.” To do that, you need to do a feasibility study of your business and yourself.

“Self-assessment, feasibility is sometimes painful,” Place says. “It’s always a good exercice to do, to sort of check yourself, to check your motive, to check your skillset and to see if your heart’s really in this.”

Place recommends taking a deep and honest look at the following areas.

Resources: Resources can be broken down into money and skills for the purpose of your feasibility study.

Money: Do you have enough money to start your business? If you don’t, do you know where you can get it? If you can’t fill the gap between the money that you have access to and your startup and operating costs, you might have to change your business idea and/or start it later, advises Place.

Skills: Do you have the skills that you need to run this business? As Place puts it: “If you want to start a bakery and you’re going to be working in the bakery in the kitchen every day, (make sure) that you have that baking skill. Otherwise, it’s going to be hard to deliver a product.” If you don’t have the skills that you need, do you know how to get them, either through education or with skilled employees or partners?

Passion: Do you really want to start up a business? If so, do you really want to start up this business? As Place puts it, “If the thought of going into your storefront or your retail store or your restaurant for the next 20 years really makes you tired, you might want to pick a different idea. Passion is what drives local business. It’s what drives great customer service. It gets people to come back because they can see you’re excited about the product, you’re excited about servicing them. You know, the people that I’ve worked with over the last five years, the ones with the greatest passion, the ones that believe in their product, are the ones that are making the most money.”

Execution: How are you going to run your business? How are you going to fulfill your own goals with this business? What’s the basic business model? Place advises you to do some rough profit and loss calculations first. After you’re done with your calculations, you should then ask yourself if your business  will let you work the hours and take home the salary that you want.

This video is geared toward people starting local businesses, rather than regional or national ones. Still, it’s worth every entrepreneur’s time.

Sierra Investment Group Inc. Carson City Nevada is a small business plan writing service and small business funding resource. They can be reached toll-free at (800) 323-6298 from 8 a.m. to 4 p.m., Monday through Friday, or at info@sierraig.com

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Tim Berry on the Type of Business Plan YOU Need

People often  ask Tim Berry, author and founder of Palo Alto Software, what type of business plan they need.  “It comes up a lot and it’s hard to answer specifically,” he says in this video, “but I kind of like asking you back, ‘What are you going to use?’”

According to Berry, most people think that a business plan is a “hard to do, ponderous, formal document” with a fixed structure. (Admit it, you probably think that, too; otherwise, you wouldn’t be here) Berry prefers business plans that are more functional than formal – that is, that will help you run your business better.

What do you need to run your business better? According to Berry, you need to:

  1. Think about the steps that you need to take in order to reach your goal.
  2. Assign metrics for keeping track of your progress, as well as tasks that your business will have to accomplish in order to reach your goals.
  3. Predict important numbers like sales, costs, expenses, liabilities, capital and so on.
  4. Track your progress.
  5. Adjust your strategy if anything falls short of your predictions.
“What kind of a plan you (sic) need? You need the plan that will help you run the business better,” says Berry. “That’s what business planning is for, and that document that you fear might or might not be required output for your plan. It might be that your plan stays on the computer, and the output is the management meetings, the plan vs. actual, the management that flows from your plan.”

Take a couple moments to watch this short video. You won’t regret it.

Sierra Investment Group Inc. Carson City Nevada is a small business plan writing service and small business funding resource. They can be reached toll-free at (800) 323-6298 from 8 a.m. to 4 p.m., Monday through Friday, or at info@sierraig.com

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Michael Hess on 5 Ways Your Business Plan Can Turn and Bite You

Michael Hess, CEO of Skooba Design, has some excellent advice in this CBS News Money Watch article for all you entrepreneurs out there:

“Challenge everything about your (business) plan, then challenge it again. Making unrealistic assumptions and/or kidding yourself – much less others – can come back to bite you.”

What kind of unrealistic assumptions? Hess identifies five.

  1. Being too attached to a product or idea. Not everyone is going to want what you’re selling. Do your homework about your service or product and be honest about the demand for it.
  2. Overestimating the market – or rather, your share of the market. Getting even a one percent market share is a daunting feat, says Hess. Don’t estimate your revenues from the top-down (from market share), but from the bottom up (from units, distribution outlets, marketing and so forth).
  3. Not fleshing out execution details. You need to know the details of how you’re going to bring your idea to fruition – or, if you prefer, how your business is going to do business. As Hess says, “…if you don’t know how to execute your idea (much less if it can be executed at all), or you don’t at least know of specific resources to which you can turn, then it’s just an idea – not a plan.”
  4. Overestimating financial results. You might overestimate your sales, rate of growth, cash flow or how fast your business will turn profitable. But if your overestimation leads to you running out of cash, then you’ll kill off your business. According to Hess, most startups have long and tortuous routes to profitability that almost never follow their business plans.
  5. Underestimating costs. Running out of cash from higher-than-expected costs will make your business fail as surely as if you run out of cash from slower-than-expected revenue. Add a wide margin of error, no matter how confident you are in your numbers, says Hess.

This is one article you need to read before you open for business.

5 Ways a Business Plan Can Come Back to Bite You

Sierra Investment Group Inc. Carson City Nevada is a small business plan writing service and small business funding resource. They can be reached toll-free at (800) 323-6298 from 8 a.m. to 4 p.m., Monday through Friday, or at info@sierraig.com

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