First, let me make a distinction between a “Business Plan” and a “Strategic Business Plan”. I define a Business Plan as something that is written for the purpose of raising money for a growing company. Most often, such a plan is written to be presented to a venture capital source or other source of funds.. Yes, it is possible to raise money for a brand new business which has not even produced one product or service.
When completed, the business plan is the means of communicating your ideas to others and makes a case for your financing needs.
A business plan contains both the characteristics of the company and those of the industry. It requires an in-depth look at the financial structure of the company including a profit and loss statement for the previous year. Other company factors include the number of employees, market share, the caliber of the people involved in the company and, most important, a realistic (believable) financial projection. Last but not least is the amount of the company you are willing to give up for the capital investment.
Even with all this information compiled into a “presentable document”, the investor/lender will want to know what makes this “deal “different. To compile a well prepared business plan involves several key players, including a CPA and an attorney to prepare the legal and financial paperwork. There has to be a very heavy involvement of the owners in making realistic and obtainable goals and the strategies for reaching those goals. The cost for the complete business plan which includes payment to all the support contributors will run between $8,000 and $50,000, depending upon the amount needed and the complexity of the product or service to be offered and the amount needed as an investment. A full business plan presentation may take as long as three or four months to complete.
A strategic focus plan is a “hands on” plan which concentrates on building a company into a profitable entity. Its focus is primarily on the owners and their vision for the company. it rarely looks for outside financing but strives to work within the framework of available funds. The final plan is an intensive work document that requires a commitment and accountability on behalf of everyone involved.
The focus is on taking the business from a “small business risk” to a stable company that has demonstrated its ability to grow and be profitable.
There are thousands of businesses looking for “funds”. A venture capital source gives a business plan a “five” minute look over and unless there is something outstanding and different it ends up in the rejected pile.
I recommend that a business first puts work clothes on its vision and achieves a period of at least two years of stable, profitable growth before it launches a quest for outside capital.
Only one in a million will come up with an “apple”, but hundreds who are willing to work can have a profitable successful business that provides financial and personal rewards.
Nick J. Petra CFP Business coach and mentor. Hurry and sign up at www.onebizcentral.com for the keys to growing a successful business. Nick can be reached at firstname.lastname@example.org