Preparing a Business Plan Only for You
From my way of thinking there are two types of business plans – one for yourself and one for investors. The one for investors is basically a marketing document and is prepared to show investors how rich they can become by supporting your proposal. I view the one you do for yourself as more important.
Many people wanting to start a business ask me how to go about it. The accounting and legalities are easily handled by professionals. The hard part has to be done by you. You need to be clear about what you really want to do and what you want to get out of the business. You also have to have some realistic expectation about the chances of success. There are a few questions that must be answered. Writing it down forces you to articulate your thoughts and deeply consider what you will be undertaking. Here are five questions you must answer.
- What will the business do?
- Who will your customers be?
- Why are you qualified to start and run this business?
- Why would people want to buy from you?
- How do you expect to make money?
While this is written in terms of a business, the same process can be adopted by someone starting a not-for-profit organization.
You are doing it for you so what you write does not need to be printed in a fancy bound book. It just needs answers. You don’t need any help for the first four questions, but might need an accountant to assist on the money part… if you get to question 5. Many people have unrealistic expectations and being forced to seriously consider and answer questions 1 through 4, puts a damper on most projects. Those that make it through question 4 have much clearer ideas of what they will be undertaking and why. To answer question 5 you might need an accountant to assist you in preparing cash flow and operating income projections. The purpose of the projections will be to determine if everything that is expected to occur will make money, and when and how much is needed to get started and sustain the business until the cash flow turns positive.
Dreams drive actions, but realistic dreams can bring success. You must plan before acting. Old cliché: Measure twice, cut once. Prepare a business plan only for you.
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