Business Plans Were All Different

[actiondell4]

I always see,even on here.posters reccomending "doing a Business plan" before buying a business,so off I go to 3 business courses in the last few weekends.

Not 1 ,not 2 but 3 different business courses with subjects including "Doing a Business Plan."

The ironic thing is,ALL 3 teachers taught how to do a business plan differently.

One used a generic question paper,another one wanted great detail.

We had all write a "dummy business plan" based on our own area opening up a business,the thing is one teacher wanted detail another one said "dont waste time" on uminmportant matters if its not going to be at leat 5% in your business.

Now the Jewish Business School teacher WANTED detail,yes even to how staff were going to be trained TO believe it or not WHAT cleaning products we would buy and WHERE.

What things do you think are important in a business plan apart from basic questions.

[phuket Mike]

I would say it all depends who the business plan is aimed at, if it is your business and more importantly your money then your business plan should outline your strategy with milestones for you to measure your progress. Also these targets can be financial, normally a business plan should detail the first 12 months and then give projections for next 2 years. In this situation your business is designed as a guide for you to follow.

If you are planning to raise finance from banks or investors then the plan should be much more detailed.

I actually cheat and us a piece of software called Business Plan Pro, it has over 500 sample business plans. I have no idea how much it costs because I was given my copy.

The most important aspect of creating a business plan is that it makes you sit down and think about what you wish to achieve.

Good luck

[BoonToong]

I would concur with what Phuket Mike has said and will add my own two ha'pennys worth (just general comments)......

I think that the type of BP you produce depends on a number of factors:

1. Is the BP intended just for your own use or to influence external investors/partners/financiers?

2. The nature of your business

3. Your own Directorial and management style.

But I think the following would apply:

1. If you intend raising finance, make your BP rich in financial content. At least a one-year cashflow forecast (can be daily, weekly or monthly depending on your business type) and at least two years P and L forecasts.

2. If the plan is purely for your own use, then I wouldn't go too far into detail. I almost certainly would not go to the detail of listing what kind of cleaning products you are going to use (in any instance). The Director of a business should do just that; 'DIRECT', not micro-manage.

3. Make the plan in a format that can be updated as your business develops (financial forecasts will probably change after the first month of trading!).

4. I reckon that tools like the SWOT analysis are extremely important. They show others that you have considered your potential business very carefully and it can act as a reminder to you when you are up to your neck in managing your business.

5. In my humble opinion the aims of the business should appear first. Again, it's a compass for you to use when your head is spinning.

I could go on and on but I think the above are key factors. There are probable many more of course.

Best wishes and good luck with your venture.

Edited December 4, 2010 by BoonToong

[cardholder]

Business plans come in many versions.

The main version is for YOU.

This is the one where you are brutally honest and throw away the rose-tinted glasses. This is the one that says "this is what I REALLY think will happen". This is the one that will determine whether you have enough capital/cash and this one will determine whether you actually proceed. This is the one against which you seek impartial, independent opinion.

[Valjean]

I'm an avid reader of Steve Blank. You'll get the gist if you read this. His writing is more geared to the start-up that is developing a new product or service. If you want to buy or start a guest house, that's a pretty established business model, a business plan is good. But if your idea is something that you can't point to - then think about what he says about focusing on getting a scalable business model.

http://steveblank.com/2010/04/08/no-plan-survives-first-contact-with-customers-%E2%80%93-business-plans-versus-business-models/

I know by they way as a man searching for clarity - I've thrown in chaos. But Steve, makes a solid case that for many start-ups over-focusing on a business plan, which is just build on a bunch of assumptions (guesses), can get you stuck on executing a plan, when you should be quickly changing and adapting as you refine your model. Once you have a scalable model in place, your plan starts to make more sense.

More...

http://steveblank.com/2010/11/01/no-business-plan-survives-first-contact-with-a-customer-%E2%80%93-the-5-2-billion-dollar-mistake/

[actiondell4]

Valjean,

I think your right,a business plan is really just "assumptions and guesses",because even if i do a plan,i am only speculating how many customers there will be.

Say for instance,we decide to open up a take away hot food place ,well make the assumption we will be busy in weekends when we have no proof.

[raro]

when you run the numbers, do a worst, standard and best cse scenario. The worst case scenario must just cover your costs and will show you the minimum requirements to stay in business.

The standard scenario should be a reasonably good assumption of what you can expect if you run your business the way you want it to be

The best case scenario should be what it is....all is running 100% perfect but we all know that this is unrealistic.

Now look at it again..is your standard scenario closer to the worst or best case scenario?

[Valjean]

Raro is right. Make a few. A plan of a start-up is by definition flawed. But you're foolish if you haven't done the numbers to a few different scenarios.

The key lesson that Steve Blank preaches isn't that you should start with you assumptions, it's that you should very quickly be ready to pivot your business model when you get real world feedback. Don't look at the plan, look at what's happening.

In your take-away model you can have assumptions - you think it will be busy weekends. But you find it's busy with the working lunch crowd. So you pivot and focus on optimizing weekday lunch take-out to office menus. That's a pivot.

If you can't get out a napkin, a pen and explain your business model and your assumptions on how you will make money before I finish my beer, you're not ready. You should be able to explain your business model "A business model describes how your company creates, delivers and captures value."

this is a good read about business model versus business plan

http://steveblank.com/2010/04/08/no-plan-survives-first-contact-with-customers-%E2%80%93-business-plans-versus-business-models/

Have fun

[raro]

If you can't get out a napkin, a pen and explain your business model and your assumptions on how you will make money before I finish my beer, you're not ready. You should be able to explain your business model "A business model describes how your company creates, delivers and captures value."

:clap2:you cannot put it better!!

Have fun

...the most important and most overlooked part of running a business!

[KwaTime]

I'm also working on a business plan, let me know if you want to share notes.

[JohnC]

Say for instance,we decide to open up a take away hot food place ,well make the assumption we will be busy in weekends when we have no proof.

So what happened to your market research? how did you define the need for your new venture? As previously stated financial information is not only needed for potential finance but to help you plan key milestones, have you worked out a budget? staff costs (inc social security payments), overheads, and what about management issues like staff appraisal, training if needed, again as stated a swot analysis would be an important start so you know who (if any) your competitors are, your own strengths, weaknesses, etc. a lot to take in and consider before taking the plunge but if well thought out with forward planning it should make the going a little bit easier but as in all cases starting up and running a business is hard work but and its a big but it's you that reaps the benefits!!

[818mike]

I know by they way as a man searching for clarity - I've thrown in chaos.

That is an understatement!

Valjean,

I think your right,a business plan is really just "assumptions and guesses",because even if i do a plan,i am only speculating how many customers there will be.

Say for instance,we decide to open up a take away hot food place ,well make the assumption we will be busy in weekends when we have no proof.

As stated above, market research is VERY important. Want to know if the weekend is actually busy? Spy on your competitor. Find a business similar to the one you envision and watch them. How many people purchase on given days? Next, how much traffic do they have on the ride outside road? You can then use those numbers to find how many customers per traffic. Do this for a few places and you will get a rough idea of how many customers you will have based on the traffic in that location. Other factors come into play such as parking but I hope you get the general idea.

Another way is to talk to business owners in other areas. In the US at least, you would be surprised at the information you can get from a simple phone call.

Mike

[David006]

I know by they way as a man searching for clarity - I've thrown in chaos.

That is an understatement!

Valjean,

I think your right,a business plan is really just "assumptions and guesses",because even if i do a plan,i am only speculating how many customers there will be.

Say for instance,we decide to open up a take away hot food place ,well make the assumption we will be busy in weekends when we have no proof.

As stated above, market research is VERY important. Want to know if the weekend is actually busy? Spy on your competitor. Find a business similar to the one you envision and watch them. How many people purchase on given days? Next, how much traffic do they have on the ride outside road? You can then use those numbers to find how many customers per traffic. Do this for a few places and you will get a rough idea of how many customers you will have based on the traffic in that location. Other factors come into play such as parking but I hope you get the general idea.

Another way is to talk to business owners in other areas. In the US at least, you would be surprised at the information you can get from a simple phone call.

Mike

Business plans can be a lot of guesswork without some serious research as you state..a major "plug in" to any business plan should include differentiation...ie what is the customers incentive to patronize your business over the other guy ...product, price, service?..the old standard marketing Ps product, place, price and promotion....

Of course don't forget the financial basics like fixed and variable costs ...rent,utilities, taxes, wages etc are fixed...your supplies costs are the variables in most cases...good luck

d

[David006]

I know by they way as a man searching for clarity - I've thrown in chaos.

That is an understatement!

Valjean,

I think your right,a business plan is really just "assumptions and guesses",because even if i do a plan,i am only speculating how many customers there will be.

Say for instance,we decide to open up a take away hot food place ,well make the assumption we will be busy in weekends when we have no proof.

As stated above, market research is VERY important. Want to know if the weekend is actually busy? Spy on your competitor. Find a business similar to the one you envision and watch them. How many people purchase on given days? Next, how much traffic do they have on the ride outside road? You can then use those numbers to find how many customers per traffic. Do this for a few places and you will get a rough idea of how many customers you will have based on the traffic in that location. Other factors come into play such as parking but I hope you get the general idea.

Another way is to talk to business owners in other areas. In the US at least, you would be surprised at the information you can get from a simple phone call.

Mike

Business plans can be a lot of guesswork without some serious research as you state..a major "plug in" to any business plan should include differentiation...ie what is the customers incentive to patronize your business over the other guy ...product, price, service?..the old standard marketing Ps product, place, price and promotion....

Of course don't forget the financial basics like fixed and variable costs ...rent,utilities, taxes, wages etc are fixed...your supplies costs are the variables in most cases...good luck

d

Just another thought or two..

There is always the danger of not wanting to believe "the BP numbers"... because it is an emotional thing...beware..( you always wanted to own a pork pie and chip shop in a Muslim community right?).lol

whatever the business it is always wise to have an exit plan/strategy and tactics...ie avoid locked in contracts/leases etc initially.

.. Once had a a beautiful "purchased from the heart" coffee/muffin/soup/sandwich shop in NA. My ex BIL, a grade 8 very lucrative pizza shop owner,spent a week at our( the ex wifes) wonderful shop helping her get going..at the end of the week he sat us down and said "sell it ..your gonna lose your shirt" we did, sell that is! We had owned it for a whole three months....