Business Plans Kit For Dummies®

Table of Contents

Business Plans Kit For Dummies®


About the Authors

Steven Peterson and Peter Jaret wrote the first US edition of Business Plans Kit For Dummies, which was released in 2001.

Steven Peterson is founder and CEO of Strategic Play, a management training company specialising in software tools designed to enhance business strategy, business planning and general management skills. He’s the creator of the Protean Strategist, a business simulation that reproduces a dynamic business environment where participant teams run companies and compete against each other in a fast-changing marketplace. He holds advanced degrees in mathematics and physics and received his doctorate from Cornell University. For more information, visit .

Peter Jaret has written for Newsweek, National Geographic, Health, Men’s Journal, Reader’s Digest and dozens of other magazines. He’s the author of In Self-Defense: The Human Immune System and Active Living Every Day. He has developed brochures, white papers and annual reports for the Electric Power Research Institute, Lucas Arts, The California Endowment, WebMD, BabyCenter, Stanford University, Collabria, Home Planet Technologies and others. In 1992, he received the American Medical Association’s first-place award for medical reporting. In 1997, he won the James Beard Award for food and nutrition writing. He holds degrees from Northwestern University and the University of Virginia.

Barbara Findlay Schenck built upon the great work of Peterson and Jaret as she wrote the second US edition of Business Plans Kit For Dummies. She’s a successful business owner, marketing consultant, author of Small Business Marketing For Dummies and co-writer of the Edgar Award-nominated memoir Portraits of Guilt. She has worked internationally in community development, served as a college admissions director and writing instructor in Hawaii, founded an advertising agency in Oregon and has helped organisations large and small to plan and manage successful marketing and management programmes. You can contact her at

Colin Barrow was, until recently, Head of the Enterprise Group at Cranfield School of Management, where he taught entrepreneurship on the MBA and other programmes. He is also a visiting professor at business schools in the US, Asia, France and Austria. His books on entrepreneurship and small business have been translated into twenty languages, including Russian and Chinese. He worked with Microsoft to incorporate the business planning model used in his teaching programmes into the software program, Microsoft Business Planner. He is a regular contributor to newspapers, periodicals and academic journals such as the Financial Times, The Guardian, Management Today and the International Small Business Journal.

Thousands of students have passed through Colin’s start-up and business growth programmes, going on to run successful and thriving enterprises, and raising millions in new capital. He is on the board of several small businesses, is a University Academic Governor, and has served on the boards of public companies, venture capital funds and on Government Task Forces.


I would like to thank everyone at Wiley, especially Steve Edwards and Samantha Spickernell, for the opportunity to adapt this book – as well as for their help, encouragement, feedback and tireless work to make this all happen.

– Colin Barrow

Publisher’s Acknowledgements

We’re proud of this book; please send us your comments through our Dummies online registration form located at .

Some of the people who helped bring this book to market include the following:

Acquisitions, Editorial, and Media Development

Project Editor: Steve Edwards

Content Editor: Jo Theedom

Commissioning Editor: Samantha Spickernell

Publishing Assistant: Jennifer Prytherch

Copy Editor: Andy Finch

Technical Editor: Paul Barrow

Proofreader: Helen Heyes

Executive Project Editor: Daniel Mersey

Executive Editor: Samantha Spickernell

Cover Photos: © Jonathan Knowles/Getty Images

Cartoons: Ed McLachlan

Composition Services

Project Coordinator: Lynsey Stanford

Layout and Graphics: Reuben W. Davis, Christin Swinford, Ronald Terry

Proofreaders: Melissa Cossell, John Greenough

Indexer: Christine Karpeles

Brand Reviewer: Rev Mengle


Business advisors are in no doubt: when you’re establishing, expanding or re-energising a business, the best way to start is by writing a business plan. The task can, however, seem a little daunting, which is where this book and its kit come to the rescue.

Business Plans Kit For Dummies, UK edition, doesn’t tell you how to proceed; it shows you how, walking you through the process with step-by-step action plans, examples and do-it-yourself forms throughout the book and on the information-packed CD-ROM. So relax. Whether you’re planning to launch a brand-new business, kick-start an idling enterprise or take a going concern to all-new heights, this book makes the process straightforward, easy, rewarding – and even fun.

About This Book

You can find plenty of books full of business-planning theories and principles, but this book is different: it cuts through the academics and steers clear of the jargon to provide an easy-to-grasp, step-by-step approach to putting a business plan together. It also offers dozens of forms to make the task easier and includes examples from all kinds of businesses – from freelance contractors and small retailers to online marketers and not-for-profit organisations.

What’s more, this UK edition includes input and advice on the most current and pressing issues facing businesses today. In response to the fact that marketing is a top concern of today’s entrepreneurs, business owners, CEOs and investors, we dedicated Chapter 7 solely to the topic. Chapter 19 offers ten things to know about finding vital sources of information for underpinning your business plan: anyone reading your business plan wants to be sure that you’ve really done your homework. Plus, all the chapters incorporate lessons from the latest stresses and strains on the financial system and the credit-crunch, opportunities presented by today’s technology and current resources, tips and planning advice.

Conventions Used in This Book

We have a few conventions in this book that you ought to know about. Important terms, which we make every effort to explain, are italicised. We place tangential, not-so-important information in grey boxes, also known as sidebars. And at the end of every chapter, we summarise the forms from that chapter that appear on the CD-ROM.

Speaking of the CD-ROM, all the forms on the CD appear in both Microsoft Word format and as Adobe PDFs. Use whichever file format you’re comfortable with. See the Appendix for more info on how to use the CD.

Foolish Assumptions

In writing this book, we’ve made a few assumptions about you. You’ve picked up this book, so you’re probably starting or growing a business – most likely a small- to medium-size business, because that’s how most ventures start. Maybe you have nothing more than the glimmer of a good idea for a business; maybe you’ve already started a business and know that the time has come to write a plan; or maybe you’re running someone else’s business or a non-for-profit organisation and you want to set and follow a clear path to success. In any case, you’re excited, ambitious and a little nervous at the thought of creating a business plan. Being excited and ambitious is good, but you need to settle your nerves, because the task you face is achievable, manageable and even enjoyable. Honest. You don’t even need previous business experience to make your way through this book, although people with experience will also find plenty of good advice.

How This Book Is Organised

From start to finish, this book offers a simple, step-by-step approach to business planning. We realise that not everyone is going to begin on the first page and end on the last, and so this book is organised to allow you to flip to the area you want and find information you can put to use right away. To get you oriented, here’s an overview of the contents.

Part I: Laying the Foundation for Your Plan

The three chapters in this part form the business foundation upon which you write your plan for success. Chapter 1 provides an overview of what’s involved in the business-planning process and what makes it so important. Chapter 2 offers advice on how to brainstorm business ideas and how to seize great business opportunities when you uncover them. Chapter 3 helps you establish the mission, vision, values and goals for your business and gives you advice for putting your principles into action.

Part II: Developing Your Plan’s Components

This part of the book gets right down to the nitty-gritty details of business planning. Chapter 4 helps you understand your business environment so that you have a clear idea of exactly what you’re up against in terms of competition and the marketplace. Chapter 5 guides you in charting a strategy that capitalises on your strengths and the opportunities that surround you. Chapter 6 helps you analyse all aspects of your business and its capabilities in order to make sure that you concentrate on what you do best and improve where you see weaknesses. Chapter 7 walks with you through the development of your marketing strategy – considered by most business advisors to be the heart of your business plan. Finally, Chapter 8 is all about deciphering and making sense of your financial situation, including how to create the financial reports and projections you need to start, run and grow a business.

Part III: Tailoring a Business Plan to Fit Your Needs

This part zeroes in on the special planning issues that different businesses face. Chapter 9 looks at the planning needs of self-employed individuals in one-person businesses. Chapter 10 focuses on small-business planning, but it applies to all businesses, big and small, that face growth opportunities or turnaround issues. If you have an established business, Chapter 11 is the one for you, and if you’re involved in putting together a not-for-profit organisation, check out Chapter 12. Chapter 13 is full of advice for online businesses or businesses adding an online component to their bricks-and-mortar establishments. Browse through all five chapters and combine advice to match your unique business situation.

Part IV: Making the Most of Your Plan

Chapter 14 tackles the nuts and bolts of putting your written plan together, with advice on assembling a planning team, compiling the components and writing a concise and reader-friendly document. Chapter 15 is all about getting the most out of your business plan by making it an integral part of your business’s organisation and operations.

Part V: The Part of Tens

Although you aren’t going to find ten dating no-nos or ten tips to a slimmer, trimmer you here, you do find ten ways to know whether your plan needs an overhaul, ten ways to evaluate a business idea, ten ways to get your business plan funded, ten sources of information to back up your plan and ten ways to use your business plan.

Icons Used in This Book

What would a For Dummies book be without the margin icons alerting you to all sorts of useful stuff? Here are the icons you find in this book:

Tip.eps Tried-and-true approaches to help save you time or trouble.

Remember.eps Business-planning essentials you don’t want to forget.

warning_bomb.eps Common problems or pitfalls to avoid.

example.eps Real-life examples that provide useful lessons on business planning.

form.eps A heads-up that the form or resource we bring up also appears on the CD-ROM.

intheplan.eps An alert that the research, analysis or strategy we describe should definitely show up in your written business plan.

online.eps Websites from which you can download free financial spreadsheets and tables. These sites can help take the grunt and groan out of number-crunching cash-flow forecasts and ‘what if’ projections, as well as help with making important choices.

Where to Go from Here

You can start anywhere you want in this book, but here’s some insider advice: Chapter 1 is a good place to begin because it provides a quick overview of the contents of the whole book. Chapter 2 is a good place to go next because it helps you fine-tune your business idea. If your idea is already polished and ready to go, the chapters in Part II help you shape your great idea into an even better business plan. The chapters in Part III help you tailor your plan to your unique business structure. Think of it this way: cover-to-cover is a great approach to follow, but you can use the index to jump quickly to the exact information you need at any time. As long as you end up with a great written business plan, the system has worked!

Part I

Laying the Foundation for Your Plan


In this part . . .

Having a business plan – which means writing a business plan – is the best way to turn your great idea into a thriving business.

The chapters in this part turn you into a business-plan convert. They present the case for why a plan is important, walk you through the process and guide you as you take the first steps towards creating a business with a long and prosperous future.

We provide tips on how to come up with a winning business idea and steps for conducting a reality check to make sure that your idea is worth pursuing. We also help kick off your planning process and offer a guided tour through the essential elements of creating your business’s mission, vision, goals and objectives.

Chapter 1

Starting Your Planning Engine

In This Chapter

arrow Understanding the contents, use and value of a business plan

arrow Identifying the people who are going to read your plan

arrow Setting your business time frame and milestones

arrow Launching the business-planning process

Because you’re holding this book, the task of writing a business plan has probably made its way to the top of your to-do list. Now you want to know what’s involved in the process and which actions to take first when writing your business plan.

Well, that’s exactly what this first chapter of Business Plans Kit For Dummies, UK Edition, is all about. It confirms your hunch that business planning is not only important, but essential, both when you start your business and at every growth stage along the way. Plus, it helps you think clearly about why you need a business plan, who your business plan is for, what key components you need to include and what time frame is reasonable.

Writing a business plan is a big task, but this book makes it manageable, and this chapter provides a quick and easy overview to get you oriented and on your way to business-planning success.

Committing to the Business-Planning Process

With a thousand issues clamouring for the precious hours in your day, committing time to plan your business’s future isn’t easy. But operating without a plan is even harder – and even more time-consuming in the long run. You took the most important step when you made the decision to write a business plan. Now you need to convert that decision into action – starting by dedicating your time and effort to the process.

As you carve time out of your calendar, these two steps are going to keep you motivated:

check.png Define your business situation and how a business plan can help you move your business from where it is to where you want it to be.

check.png List the ways that a business plan can heighten your business’s odds of success.

The next two sections lead the way.

Defining your business-planning situation

To get your business where you want it to go, you need a map to follow, which is what your business plan is all about. It starts with a description of your current situation; describes your future plans; defines your opportunities; and details the financial, operational, marketing and organisational strategies you’re going to follow to achieve success.

Tip.eps Take a minute to think of your business as a boat about to set sail on an ocean race. Your business plan defines your destination and the route that you’ll follow. It details the supplies and crew you have on board as well as what you still need to acquire. It forecasts the cost of the voyage. It describes the weather and sea conditions you’re likely to encounter along the way and anticipates the potential dangers that may lurk over the horizon. Finally, your business plan identifies the other crews that you’re up against and their strengths and weaknesses.

The same kind of planning is necessary on dry land. To navigate a new course for your business, you need to start with an assessment of where your business is right now – in other words, what current business situation you want to address or overcome. You need to define where you want to arrive and what strategies you’re going to follow to get there.

form.eps To define your current business situation, use Form 1-1 on the CD-ROM. It lists some of the many situations that businesses face as they embark on the planning process. Take a few minutes to tick off the situations that apply to your circumstances.

Buying into the value of business planning

The time you invest in your business plan will pay off many times over. Here are some of the most obvious benefits you can gain from business planning:

check.png A clear statement of your business mission, vision and values to keep your business on track in good times and bad

check.png A chance to test your ideas on paper before committing real resources

check.png A description of your business model, or how you plan to make money and stay in business

check.png A blueprint you can use to focus your energy and keep your business on track

check.png A clear-eyed analysis of your industry, including opportunities and threats

check.png A portrait of your potential customers and their buying behaviours

check.png An assessment of your major competitors and your strategies for facing them

check.png An honest assessment of your business’s strengths and weaknesses so you have greater confidence to push ahead

check.png A road map and timetable for achieving your goals and objectives

check.png A description of the products and services you offer

check.png An explanation of your marketing strategies

check.png An analysis of your revenues, costs and projected profits so you know just how much money you need and when you need it

check.png An action plan that anticipates potential detours or hurdles you may encounter

check.png Milestones you can use to track your performance and make midcourse corrections

check.png A ‘handbook’ for new employees describing who you are and what your business is all about

check.png A ‘résumé’ you can use to introduce your business to suppliers, customers, financiers, vendors and others

Identifying Target Audiences and Key Messages

Your business plan is the blueprint for how you plan to build a successful enterprise. It’s a comprehensive document that covers a lot of territory and addresses all sorts of issues. To help focus your efforts, consider which groups of people are going to have the greatest impact on your success. These groups are the primary audiences for your business plan.

For example, if you need capital investment, investors are your primary audience. If you need to build strategic alliances, you want to address potential business partners. After you know who you want to reach with your business plan, you can focus on what those readers want to know and what message you want them to receive. This section helps you to define your audience and your message before you begin to assemble your plan.

Your audience

All the people who have an interest in your business venture – from investors and lenders to your employees, customers and suppliers – represent different audiences for your business plan. Depending on the situation you face and what you want your business to achieve through its plan, certain audiences are more important than others:

check.png If your business seeks investment capital, your all-important target audience is likely to be filled with potential investors.

check.png If your plan includes the introduction of share options (possibly in lieu of high salaries), your current and prospective employees are a primary target audience.

check.png If you’re launching a business that needs clients, not cash, to get up and running – the sooner the better – potential customers comprise your plan’s primary audience.

check.png If you’re a new business and you need to win over suppliers and perhaps your new landlord, then they are a very important audience.

check.png If you’re a self-employed freelancer, your plan may be for you and you alone to focus your efforts, chart your course and anticipate problems before they arise, and perhaps to keep your spouse or partner onside.

form.eps Form 1-2 presents a list of the most common audiences for a business plan. Tick off the groups that you think are going to be most important to your business success, given your current situation. Figure 1-1 presents a copy of this form, completed and annotated to suit this businessperson’s intentions.

Figure 1-1: A sample completed Form 1-2, identifying the audiences for a new business plan.


Your message

After you target the audiences for your plan, the next step is to focus on the key messages you want each group to receive. People with different stakes in your business read your business plan with different interests and values. For example:

check.png People who own or plan to own shares in a business want to read about growth plans.

check.png Bankers considering a loan request want to see proof of strong and secure sales revenue, profit prospects and security for their loan.

check.png Employees want to see how they’re going to benefit from the business’s growth and profits.

check.png Stock market regulators need to focus on operational and financial issues, which is applicable if you aim to float on a stock market.

For advice on targeting and talking to your key audiences, including information on which parts of the business plan various audiences turn to first and how to address multiple audiences with a single plan, turn to Chapter 14.

form.eps But for now, do some preliminary planning, using Form 1-3 on the CD-ROM:

1. Identify the three most important audiences you intend to address with your business plan.

For help, refer to the list of common audiences in Form 1-2.

2. Jot down key points you need to make to each target audience.

Writing down your key points doesn’t require perfect English; just get your ideas down on paper so you can refer to them when you begin writing your business plan.

Figure 1-2 shows a sample completed version of this form.

Figure 1-2: Form 1-3 enables you to plan the main points to get across to your main audiences.


Understanding the Anatomy of a Business Plan

Written business plans are as varied as the businesses that compile them. Some plans run to almost 100 pages whereas others barely fill a few sheets. Some plans start with executive summaries and others plunge right into detailed descriptions of products and services. Some businesses print their business plans on paper and some publish their plans exclusively on the web. Some plans include page after page of financial projections and others list only anticipated costs, expected revenues and projected profits.

Every business plan is written for a different reason and to obtain a different outcome. Still, some plans are better than others. The following information helps you write a plan that is sure to win high marks.

Ordering your business-plan contents from beginning to end

Business plans come in all shapes, sizes and formats – even colours – but they all share a similar framework. The following components, presented in the order they generally appear, are common elements in most business plans:

check.png Table of contents: This element is a guide to the key sections in your business plan and is essential if your plan exceeds ten pages.

check.png Executive summary: This summary covers the key points in your business plan. Write one if your plan runs to more than ten pages and you want to convey important information upfront. Because many readers dig no deeper than your executive summary, you want to keep it clear, captivating and brief – in fact, try to keep it to two pages or less. As you would expect, the summary is written last, when the rest of your plan is in place.

check.png Business overview: This section describes your venture and the nature of your business. It may include your mission and vision statements as well as descriptions of your values, your products or services, ways in which your business is unique and what business opportunities you plan to seize. (Turn to Chapter 3 for help in defining your business purpose and developing your business overview.)

check.png Business environment: This section includes an analysis of your industry and the forces at work in your market; an in-depth description of your direct and potential competitors; and a close look at your customers, including who they are, what they want and how they buy products or services. Think of your business environment as describing everything that affects your business that’s beyond your control. (Count on Chapter 4 to help you zoom in on your environment and develop your analysis.)

check.png Business description: In this section, include information about your management team, organisation, new or proprietary technology, products and services, operations and marketing potential. Focus on areas where you have real advantages over your competition. (Check out Chapter 6 for help in writing your business description.)

check.png Business strategy: Here’s where you detail your road map to the future. This section brings together the information about your business environment and your resources and then lays out a strategy for going forward. Included in this section is your analysis of the opportunities, threats and uncertainties that your business faces along with the ways you plan to avoid pitfalls and take advantage of opportunities. (As you prepare this section, use Chapter 5 as an indispensable resource.)

check.png Marketing plan: This section is where you describe how you plan to reach prospects, make sales and develop a loyal customer base. Because customers and sales are essential to your success, this section is a major component of your business plan. (Chapter 7 is devoted exclusively to helping you develop your marketing plan.)

check.png Financial review: This section includes a detailed review of the state of your current finances and what you expect your financial picture to look like in the future. It typically contains financial statements, including a profit and loss account, your balance sheet and a cash-flow statement. If your success depends on getting additional funding, you must show how much you need in this financial review section – and how you propose to secure it. (If any of these terms seem foreign to you, or if you want step-by-step financial planning advice, see Chapter 8 for all the details.).

check.png Action plan: In this section, you detail the steps involved in implementing your business plan, including the sequence of actions and how they align with your goals and objectives. (Flip to Chapter 3 for advice on establishing goals and objectives, and then turn to Chapters 14 and 15 for information on how action plans ensure that you put your business plan to work.)

check.png Appendixes: This section includes detailed information that supports your business plan. It may include CVs of key employees including founders, reports, surveys, legal documents, product specifications and spreadsheets that deliver a rounded understanding of your business plan. Not all your readers are going to be interested in all this information and having it in an appendix helps to keep the flow in the main sections of your business plan.

Tip.eps Keeping the appendixes separate from the rest of the business plan makes referring to them easier for the reader. If you’ve ever tried to keep one finger on the page where a business plan refers to the appendix and used another to skim through the pages at the back where the appendixes often are then you’ll understand why this helps! Also, if your plan is already looking a bit long, separating the appendixes makes the main plan look less intimidating.

form.eps The preceding list of the major components of a typical business plan is featured in Form 1-4 on the CD-ROM. As you get down to the business of writing your plan, use the items on Form 1-4 as a checklist, ticking off the major components as you complete them.

Not all business plans include all the components we list. For that reason, we don’t provide any rigid business-plan model in this book. Instead, you find information on how to develop each of the major components, advice for how business plans tend to work for different kinds of businesses and ways you can organise and present materials in your written plan.

Frequently asked business-plan questions

If you’re like most people who get this far into the business-planning process, you have some questions right about now. You may even be at the hand-wringing stage. Relax, because in this section we answer the most frequently asked questions about writing business plans.

Do I really need to include all these sections?

Nope. Your business plan should include only what’s important to you, your business and your intended audience. If your plan is short – or written mostly for your own purposes – you can dispose of the executive summary, for example. And if you’re a sole trader, you probably don’t need a section describing the organisation of your business (unless you want to give yourself a plan for how to get organised yourself!).

Tip.eps For most businesses, however, the more complete your business plan is, the better off you are. If yours is a one-person operation, for example, you may figure you can do without the business overview section because you already know what your business is all about, right? Well, you may find that by compiling that section – by putting your mission, vision, values, product offering and unique attributes into words – you uncover new ideas about what you really plan to do with your business. And that can be an extremely valuable exercise for any business, whatever its size.

Tip.eps Even if you think you know your own business extremely well, getting someone else to read through your business plan to give it a sanity check can be a really useful exercise. The more you include in terms of background, the easier it’ll be for your reader to understand and evaluate your business plan.

Do I really need to write it all down?

The one-word answer is yes. Creating a written plan forces you to face tough issues that you may otherwise ignore, such as:

check.png How large is my market?

check.png Why are customers going to come to me and not my competition?

check.png How much money do I honestly need to get the business off the ground?

check.png When can I realistically expect to make a profit?

check.png What other opportunities can I take advantage of?

check.png What threatens my business?

By putting your thoughts down on paper, you give each question the attention it deserves. For example, when you write your business plan, you define your customers and your strategy for reaching out to them; you also analyse your competition and how your offerings compare to theirs; you uncover market opportunities to seize and threats to buffer yourself against; and you establish a set of goals and objectives – along with your action plan for achieving success. And when you’re done, you have it all in writing for quick, easy and frequent reference.

How long should my plan be?

The simple answer is as long as it needs to be and not a single word longer. A business plan as thick as a Stephen King novel doesn’t impress anyone. In fact, it’s likely to scare people off. What really impresses investors, clients, employees and anyone else who may read your plan is clear, straightforward and to-the-point thinking. Don’t go overboard in the cutting room or leave anything important out of your plan purely for the sake of keeping it brief, but do condense every section down to its most important points. Even comprehensive plans usually fit on 20 to 30 pages, plus appendixes. And that makes many 100-page business plans about 75 pages too long!

Establishing Your Plan’s Time Frame

Your time frame represents how far out into the future you want to plan. You want your business to grow successfully for years and years into the future, but that doesn’t mean your current business plan goes all the way to forever. Each business plan covers a unique planning period. Some are designed to get a business to a defined sales level, a funding objective or the achievement of some other growth goal. A good business plan covers a time frame that has a realistic start and finish, with a number of measurable milestones in between.

Committing to a schedule

How far out should your planning horizon go? Your answer depends on the kind of business you’re in and the pace at which your industry is moving. Some ventures have only six months to prove themselves. At the other end of the spectrum, organisations that have substantial grant funding, such as not-for-profits, are in for the long haul with business plans that look at five- or ten-year horizons. Typical business plans, however, tend to use one-, three- or five-year benchmarks (odd numbers are popular, for some reason).

Remember.eps Business planning is an ongoing process. From year to year – and sometimes more often than that – businesses review, revise and even completely overhaul their plans. As you establish your time frame, don’t worry about casting it in stone. Instead, think of your schedule as something you commit to follow unless and until circumstances change and you make a conscious decision to revise it.

Defining milestones

Setting goals and establishing measurable objectives is a critical part of business planning. (Take a look at Chapter 3 to find out more about setting goals and objectives.) But knowing your goals and objectives isn’t enough. You can’t just say you’ll get around to achieving them; you need to establish and hold yourself accountable to a schedule that includes specific milestones along the way.

example.eps Figure 1-3 shows how a retail store specialising in digital equipment (cameras, recorders and other devices) answered five basic questions in order to establish a reasonable time frame for its expansion plans. Based on their answers, the owners determined that the business would need one year to open new stores and achieve profitability. Over that year-long planning period, they defined a number of milestones:

check.png Month 1: Complete business plan

check.png Month 2: Secure business loans

check.png Month 3: Begin search for retail space

check.png Month 5: Lease and develop retail space; begin hiring

check.png Month 7: Open shops; run holiday ads

check.png Month 8: Holiday shopping season begins

check.png Month 12: New stores become profitable

Figure 1-3: The questions included in Form 1-5 help determine an appropriate time frame for your business plan.


form.eps To establish a time frame for your business plan, look over the questions on Form 1-5 on the CD-ROM and answer the questions that are relevant to your situation. Your responses help you to set a time frame that includes your key milestones and takes into account your business trends and cycles and the competitive and financial realities of your business.

Preparing for the Real World

You’re about ready to dive into the business-planning process. By now you’re pretty certain about the purpose and benefit of your plan, and you have a fairly clear idea of who you want to read your opus when it’s ready and what you want them to find out and do as a result. You may even have a preliminary idea of your planning timeline. (If any of that sounds like a foreign language, look back at the preceding sections in this chapter.)

Before you turn to Chapter 2 and dive into the planning process, however, take a minute to become aware of some of the many resources you can turn to for additional tips and tools along the way.

Locating informative resources

You’re certain to have questions as your business planning gets underway. For instance, you may want to find out about trends in your industry or marketplace or obtain information on your customers or competitors. Maybe you need more information before you develop your marketing plan or need help with your finances. Luckily, you have plenty of places to turn to for help. Here’s a list of the places you can check out for more information:

check.png Internet: You can dig up information on markets, customers, competition – you name it. When using search engines, enter your best-guess term for what you want to find, and you’ll be amazed at the results. You can also visit industry websites for goldmines of information. And, by all means, go to the sites of your leading competitors to read company overviews, news releases and all kinds of other information.

check.png Local college or university library: The periodical section of your library has business journals and other useful publications, and the reference shelves contain books on market demographics, industry trends and other factual resources.

check.png Nearby business school: Many schools offer seminars or night classes open to the public, and professors are usually happy to answer your questions.

check.png Industry trade journals: Yes, the subscriptions are sometimes pricey, but they’re often well worth the investment.

check.png Newspapers: No matter what your business, The Times, The Financial Times and a local paper keep you on top of issues you should follow.

check.png Trade shows and industry symposiums: These are great places to get news about products, services, customers and your competitors – all under one roof. The website gives a listing of all exhibitions up to a year ahead.

check.png Business Link: A rich resource supported by the government for just about everything you want to know about starting and running a small business. Look online at .

check.png Search and research companies: Using these resources comes with a price, but sometimes a Lexis/Nexis () search or a market-research study is the only place to find must-have data.

check.png Professional groups: Almost every profession has a professional group, from the British Computer Society to the Voucher Association. Find the group that serves your business arena and check out the website and membership requirements.

check.png Local business networking groups: These groups comprise members with experience, insights and even business referrals to share.

check.png Local chamber of commerce: A good vehicle for networking and staying abreast of local and county issues and can serve as a resource for all sorts of business and regional information. Check out their website ().

Seeking expert advice

When you can’t find the answers to specific questions, ask for advice. For example, if you’re thinking of starting a retail business in town, ask other retailers to fill you in on what you need to know. If you want to break away from the corporate grind and go into business for yourself, schedule a lunch with someone who has made a similar move to discover what striking out on your own takes. You’re sure to get an earful of useful firsthand advice to implement in your business planning.

Tip.eps As you interview industry contacts – or people with experience in similar businesses – follow these steps:

check.png Prepare your questions in advance. With a little advance planning, you don’t forget to discuss something really important.

check.png Explain exactly why you’re asking for help. You can’t expect people to be open with you if you aren’t honest with them.

check.png Be prepared to listen. Even if you’re told something you don’t want to know, listen anyway. Anybody who warns you about potential obstacles is doing you a big favour.

check.png Keep the conversation open-ended. Always ask whether you should be thinking about other issues or addressing other topics.

check.png Build your network of contacts. Ask for introductions to others who may be helpful or for suggestions for sources of useful information.

check.png Be grateful. Pick up the lunch or dinner tab. Write a quick thank-you note. Remember that you may need to turn to the same people later for additional advice or help.

Sharing the load

Unless you want to feel overwhelmed and burdened, you need to identify the key people who can help you during the business-planning process:

check.png If you’re in business on your own, the chances are that you have to shoulder most of the business-planning efforts yourself. But that doesn’t mean you can’t enlist the help of friends or colleagues to read over what you’ve written and tell you whether it makes any sense. Outsiders bring a new perspective to your plan. Just remember one thing: you need honest opinions, and so make sure that the people you choose feel free to praise and criticise. The last thing you want is a yes-person giving you guidance.

check.png If you’re part of a business team, enlist the help of others in your company. For one thing, people with different backgrounds have different perspectives that add breadth and depth to your business plan. What’s more, by involving key people in the planning process, you ensure that they have a strong stake in getting results after you finish the written plan.

check.png warning_bomb.eps If you’re in a big business, you may delegate a lot of the work involved in creating and writing a business plan. Some businesses even hire consultants to handle parts of the process. The downside of sourcing the work to outsiders is that you may end up with a plan that doesn’t really reflect what’s happening in your business. Worse yet, you may fail to win the commitment of the managers who are ultimately responsible for putting the plan into action. Instead, make sure that your senior management team plays a central role. The marketing team, for example, may be charged with writing the business-strategy section, and the business’s accountant is an obvious choice for completing the financial review. And think about asking someone in corporate communications to write a crisp, clear, to-the-point executive summary (but wait until all the other parts of the plan are completed and ready to be summarised).

Staying on track

form.eps To organise your business-planning process, use Form 1-6 on the CD-ROM. It lists the major components of a typical business plan and provides spaces for you to assign names and dates. If you intend to delegate, you can use this form to keep track of who’s in charge of which business plan component and when it’s due. If you’re planning all by yourself, you can use the form to track your progress.

warning_bomb.eps When you enlist help in putting together a plan, you’re probably asking the people around you to take on more than their usual workloads. To avoid overwhelming the office, create a reasonable schedule for getting the work done. And to keep everyone motivated, share the importance of the planning process. (See the section ‘Buying into the value of business planning’ earlier in this chapter if you need ammunition.) If you’re asking people to put in overtime, reward them for their efforts. A dinner out to celebrate important milestones in the planning process can go a long way toward keeping enthusiasm high.

Tip.eps Because business planning involves a lot of brainstorming, discussion, vision and revision, it generates a lot of paperwork. To keep track of everything, name one person to be the keeper of a loose-leaf notebook containing all the materials related to your plan. If you’re on your own, that person is you. If you’re heading up a planning team, make sure to assign a person who’s a natural-born organiser.

Finally, consider using business-planning software to help you through the process. All sorts of tools are available – from freeware and shareware programs to full-service commercial software. Web addresses for these as well as a number of software tools, trial versions and demos are on the CD-ROM – see the Appendix for details.

Forms on the CD-ROM

Check out the following forms on the CD-ROM designed to help you get ready to start the business-planning process:

Minitable 1-1