Business Planning Overview

The successful entrepreneur is generally more inclined, once a business idea is selected, to sharpen the concept by a detailed planning process. The result of this step is a comprehensive business plan, with its major components being the marketing "mix," the strategic plan, operational and logistical structures, and the financial proposal. The purpose of the business plan is to recognize and define a business opportunity, describe how that opportunity will be seized by the management team, and to demonstrate that the business is feasible and worth the effort.

The business plan is the "blueprint" for the implementation process. It focuses on the four major sub-plans: marketing; strategy; operational/logistic; and financial. While the business plan often goes through some revision, it generally represents a rather advanced stage in the planning process. The primary product or service to be offered, based on the results of the market research, should be determined. Whether the business will be a start-up, purchase of an existing business or a franchise should certainly be firm at this point. Often, a specific business location is indicated, or at least a rather specific area.

Time estimates in a business plan should allow for meeting all the necessary regulatory requirements and acquisition of permits to get to a "customer-ready" condition. The amount of funding required and a general approach to raising these funds should be determined. Marketing mix issues focus on how the product or service is differentiated from the competition.

A business can differentiate itself on any of what are often referred to as the "four P's" of marketing: product characteristics, price structure, place or method of distribution, and/or promotional strategy.

Strategic issues relate broadly to the company's mission and goals. Every venture must continually assess its strengths and weaknesses, the opportunities to be seized, and any threats to the success and plans of the business. Operational issues relate to company structure, and the scope of the business. The operational plan addresses tangible items such as location, equipment, and methods of distribution. Decisions on these issues largely determine startup costs.

The financial proposal includes an estimate of the amount of money needed to start the venture, to absorb losses during the start-up period, and to provide sufficient working capital to avoid cash shortages. It projects sales and profitability over some period into the future, generally 3 to 5 years. Where outside funding is sought, it also describes distribution of ownership of the venture and methods of debt repayment and/or buyback of partial ownership.

Where implementation of the plan requires participation of lenders and/or investors, the plan must clearly and convincingly communicate the financial proposal to the prospective stakeholders: how much you need from them, what kind of return they can expect, and how they can be paid back.

Many entrepreneurs insist that their business concept is so clear in their heads that the written plan can be produced after start-up; this attitude "short-circuits" one of the major benefits of producing the plan. The discipline of writing a plan forces us to think through the steps we must take to get the business started, and, to "flesh out ideas, to look for weak spots and vulnerabilities," according to business consultant Eric Siegel.

A well-conceived business plan can serve as a management tool to settle major policy issues, identify "keys to success," establish goals and check-points, and consider long-term prospects. The plan must realistically assess the skills required for success of the venture, initially and over the long run, and match the skills and interests of the team to these requirements. Test the plan, and an accompanying oral presentation, on friends whose business judgment you value. Let them assume the role of a prospective investor or lender.

John B. Vinturella, Ph.D. has almost 40 years experience as a management and strategic consultant, entrepreneur, author, and college professor. For 20 of those years, Dr. Vinturella was owner/president of a distribution company that he founded. He is a principal in business opportunity sites jbv.com and muddledconcept.com, and maintains business and political blogs.

---

The Perfect Little Coffee Shop: Are You Afraid of Failure? Are You Letting that Failure Cripple You

Ah, coffee, the drink of choice when I want to... Read More

5?4?3? 2...1?

A streak dating back more than three decades came to... Read More

Entrepreneurship as Your Passion

Entrepreneurship has been my passion for as long as I... Read More

Documenting Partnerships in Your Business Plan

Forging partnerships to improve market penetration has become commonplace, particularly... Read More

Which Niche To Conquer?

I'm sure that you've heard about how many start up... Read More

Entrepreneurial Ongoing Education Advice

I would like to give some advice to all the... Read More

Protect Your ASSets in Business

Many people are starting an online business without a thought... Read More

Two Types of Business Plan Executive Summaries

Companies seeking capital often ask how long the Executive Summary... Read More

Have You Been Thinking About Owning Your Own Business? Or Becoming An Entrepreneur? Part 1

Almost every day, I talk with people who want to... Read More

Hurricane Katrina, Death, and a Different Type of Entrepreneurship

I've seen terrible images today on the television and internet-bodies... Read More

Cut to the Quick - What is an Entrepreneur? The Inside Story

Enjoying the title of entrepreneur is a hollow feeling.If you... Read More

Are You An Entrepreneur?

With all the buzz about everybody being an entrepreneur these... Read More

Use Your Youth To Your Advantage

You should wait until you're older and have more business... Read More

The Entrepreneurs Prayer

As I awaken with the gift of yet another day... Read More

Top Ten Ways to Increase Your Profitability

1) Go back to basics. Take a couple of steps... Read More

Drive Website Traffic Unconventionally, Force Your Children To Do It

If you believe that every little bit helps then keep... Read More

Can You Make Money Without Money?

When I ask why you don't start your own business,... Read More

Fear of Failure

Of all the real or perceived impediments to success, the... Read More

How To Find Hot Online Business Ideas

Would you like to find the key that unlocks the... Read More

CHINESE TAKE-OUT: Oriental Business Principles Demystified For Online Enterprises

"The expectations of life depend upon diligence; the mechanic that... Read More

How Entrepreneurs Succeed - The 5 Qualities Needed For Business Success

What is it that sets a successful businessperson apart from... Read More

Health Insurance for Solo Entrepreneurs

One of the most important benefits employed people enjoy is... Read More

What Online Millionaires Tell Me They Are Worried About

I just arrived back from the best seminar I have... Read More

Entrepreneurs Ask: As a Novice Entrepreneur, How Can I Feel Less Overwhelmed?

Great question! Overwhelm is very common even among the most... Read More

Questions For The Entrepreneur To Be

Entrepreneurial e-gnorancePart 1: Questions for the entrepreneur to beIf you... Read More

Differentiation ? Smart Marketing Strategies for the Solo Entrepreneur

Are you ever frustrated or hesitant when you talk to... Read More

How To Start a New Business

While it is tempting to just leap into a new... Read More

Bonsai Marketing

Site location analysis of regional service areas and planning for... Read More

Franchises - Emotional Fulfillment - The Challenge

Does A Franchise Meet Your Needs?Do you look forward to... Read More

Near-death Experience is the Mother of Invention for Two Dallas Electricians

To morning commuters, the hulking truck encircled with barricades and... Read More

Creativity & Entrepreneurship: The Secret to Discovering Your Purpose in Life!©

Hello Creative Entrepreneurs!In the second course on Creativity & Entrepreneurship... Read More

Answering Why You, Why Now Critical in a Winning Business Plan

Business plans continue to be an essential element of the... Read More

Focus is the Key to a Successful Startup

The definition of a startup means you have very few... Read More