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Business Plan and Start Up Newsletter Issue #1025-Do I Need A Business Plan?
December 08, 2005
Business Plan Pro... Everything banks; lenders and the SBA look for! Produce your business plan quickly and easily... For entrepreneurs and small-business owners. Business Plan Pro 2005
Do I Need A Business Plan?
How Can We Help You Write Your Business Plan?
Winning at Business With Your Marketing Game Plan
A Few Cool Helpful Notes
Not everyone who starts and runs a business begins with a business plan, but it certainly helps to have one.
If you are seeking funding from a venture capitalist, you will certainly need a comprehensive business plan that is well thought out and demonstrates sound business reasoning.
If you are approaching a banker for a loan for a start-up business, your loan officer may suggest a Small Business Administration (SBA) loan, which will require a business plan.
If you have an existing business and are approaching a bank for capital to expand the business, they often will not require a business plan, but they may look more favorably on your application if you have one.
Reasons for writing a business plan include:
What's in a business plan?
If you are writing a plan for your colleagues and partners, for example, to expand an existing business, then the focus of that plan may be more operational than financial.
Yes, you are going to show your partners how this expansion will mean more revenues, but they are going to want to know the nuts and bolts of how this new venture is going to be implemented.
If you are writing a business plan for a bank, your bank manager will want to see that your ideas are well thought out, but the most important aspect to him or her will be your financials.
Are your assumptions realistic? And will the cash flow of the business be enough to ensure that you can make the monthly payments for the loan that you have requested?
If your business is making $1,000 a month and your payments are $1,200 a month, the bank is likely to turn you away.
When considering an investment opportunity, most venture capitalists look at the obvious trends and market niches.
Transcending the business elements, however, the most important factor in a decision to invest in a company is the quality of the people. In real estate, the three biggest criteria are "location, location and location."
The venture capital axiom is "people, people and people." VCs will ask, how experienced are the people that are going to run this business? Do they have knowledge of the industry? Have they started successful ventures in the past?
What makes a successful business plan?
Bringing it all together...
You want your calling card to look impressive, so make sure your business plan is printed out on good quality paper, you have checked the spelling and grammar and that your numbers add up.
Anyone who sees errors while reading your plan will wonder whether you are going to make similar errors in running your business.
A great business plan is the best way to show bankers, venture capitalists, and angel investors that you are worthy of financial support. Make sure that your plan is clear, focused and realistic. Then show them that you have the tools, talent and team to make it happen.
So I have written a manual that will help you with writing your business plan.
This manual is intended to aid you in the preparation and the writing of your business plan for your business.
The first part of it is written to help you write your business plan. There is plenty of note space for you to take notes as you move through it. You can also take additional notes on other paper as needed.
You should write your business plan as you go through this manual. Or, you can go to the Quick Start... Business Plan Work Shop.
This section is written for those of you that want to write a quick little business plan in a speedy amount of time.
This section also includes some worksheets in a printable form. You can use these worksheets to help you figure out some of the financial information that your business will need to complete.
For More Information about; How To Write A Business Plan... Made Easy
Stuart from Colorado had talked to a number of marketing firms and gotten estimates for designing and printing his marketing materials and building a web site for his business producing promotional cds. One firm quoted $100,000 to build his web site alone. He sensed something was missing or wrong, but couldn't put his finger on it, so he called me.
I asked Stuart how the various marketing pieces and activities were going to work together to help him generate leads. I asked him what his marketing strategy was. He drew a blank. The marketing firms he had talked to had provided detailed information on what they were going to produce for him, but none had discussed a coordinated plan to generate leads and sales.
Marketing without an integrated strategy is like playing poker, tennis or football without knowing the rules, keeping score or having a game plan. You could put in a lot of time, energy, and capital, and still end up losing the game. Has this happened to you?
Winning at business is the same as any other game, whether your objective is to beat the competition or just to be the best in your industry. To be successful, you need to know the rules of the game, have a clear strategy and track your progress.
The Rules for Winning at Marketing and Sales
Here are some of the most essential rules to follow to succeed at marketing your business.
1. Written goals are motivating and can help you succeed.
Define your objectives for revenue, lead generation and conversion rates for the year and then break those down for each quarter. Commit them to writing. Next list the weekly and daily tasks you and/or your employees need to accomplish in order to reach your goals.
2. The more qualified prospects you can attract, the more clients you'll have. A clearly defined lead generation strategy will bring in the new prospects you need to be profitable.
3. It's easier to convert prospects to clients when they are looking to solve a problem. It's much harder to convert people who don't have a current need or concern, even if they are members of your target market. Instead of seeking prospects, prompt prospects to look for you.
4. You'll get a better response from marketing messages that are focused on client problems and concerns, not on your credentials or descriptions of products and processes. If you're not getting the response you'd like from your mailings, ads or web site, take a second look at your marketing message. A few changes in your marketing copy can increase response by factors of ten or more.
5. Integrate your tactics and message across your marketing materials, ads, and web site to prompt people to seek you out and contact you. Trying to generate leads without an integrated strategy is like playing football without a set of plays for the quarterback to use with the team. He'd end up throwing the ball only to find the receiver had gone the other direction or go for a field goal on the first down.
6. The purpose of having a web site is to generate leads.
Once you have a lead you can use it to generate sales. Once you get prospects to your web site or reading your marketing materials, make sure you prompt them to contact you.
7. Most sales are the result of a relationship based on your credibility and the value of your products or services. Developing these relationships can take weeks or months to build. Your marketing strategy should facilitate this process of building relationships over time, with multiple opportunities for contacting prospects.
8. The easiest people to sell to are past customers. Prompt first time clients to buy from you again and again.
In order to know if your marketing is working you need ways of keeping score. Which marketing results are you tracking?
Which additional ones should you define each month and quarter to track?
Keep track of these important 'scores' to evaluate your marketing:
1. How many prospects seek your firm out each month? Is this number growing each month by five to ten percent?
2. What percentage of people who are exposed to your ads, your web site and other marketing materials give you their contact information so you can stay in touch with them?
3. How many people are on your house list of qualified prospects? How fast is this list growing each month?
4. How many people buy from you each week? What is the dollar volume of each sale?
5. How many sales come from repeat customers?
Whether we're talking poker, tennis, or marketing your small business, the objective is to improve your performance and succeed more often. When you have a game plan, know the rules and track your scores, you can continually find ways to improve your marketing and be more successful.
2005 © In Mind Communications, LLC. All rights reserved.
The author, Charlie Cook, helps service professionals and small business owners attract more clients and be more successful. Sign up for the Free Marketing Plan eBook, for small business owners and people responsible for marketing, '7 Steps to get more clients and grow your business' at http://www.marketingforsuccess.com
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