The contents of business plans vary with the size of the business and the needs of the business. Perhaps the best way is to illustrate this with a true story. (I changed a few details to protect the privacy of my client but the story line is true).
A current client, when he graduated from college, went to work for a Fortune 500 firm. Moving up the ranks during his employment, he found himself after 24 years, head of the marketing department. The position had the prestige he sought as well as the pay but he was not satisfied with the corporate politics and the lack of family “togetherness”. Armed with a master’s degree in business and the 24 years of corporate experience, he felt confident that he could start and succeed in his own business. With what he felt was a substantial nest egg, he quit his job and started the search for an ideal business to start. He business he decided to start fit in with his interests and perceived talents, and the planning process began.
Knowing the value of a business plan he contracted for one that was patterned after the one his previous company used. It was a major investment, but he was taught in grad school that every business had to have a plan. When I started working with him, I reviewed a copy of the plan, all 146 pages; it was “a work of art”. Contained between the covers was every imaginable business issue including income and expense projection for the next 7 years. This included staff projections, future space needs, target market identification and a long term marketing plan. When he was referred to me almost two years ago, nothing was working “according to plan”. Revenue still did not cover expenses. When I asked him how often he looked at his business plan, his answer was “not since the end of my first month in business”.
Let me summarize my point: Large firms move slowly, they lack the necessary mobility to make rapid changes. In my opinion, the business plan was a goal to be reached, not a working plan that gave details on how to reach those goals. A well designed business plan for a small business should not exceed 20 pages. It should build a foundation. Yes resources are a part of the foundation building process, but the main function of this type of plan is based on action items that will generate a sustained growth pattern. Basic parameters are established; vision statement, value system, opportunities examined and action plans with an accountability factor are developed. Everything in the plan is prioritized, and the plan is reviewed and updated every six months. In business change is the only constant, and a small business owner must take advantage of the size of the business which creates a competitive advantage over larger competitors. The owner is closer to the target markets and can make the needed adjustments as the economy and technology change and other factors mandate.
Simplicity, along with achievable goals and implementation plans is the most pressing need for a small business during its first few years in business. Work with your coach weekly, if possible. Implement the plan and then make the necessary adjustments along the way.
Nick J. Petra CFP www.strategicduck.com
Plan correctly to make 2013 your best year ever.