Next week I will be giving a presentation on the components of a business plan, how they interact, and why it is necessary for every business to have one. A typical business plan may have 10 or more sections that are analyzed and then integrated into the final plan.
Business plans can be boring; many sit in a drawer in an owner’s office and are seldom if ever used. I have seen plans that are close to 100 pages long and some with colorful charts and graphs that look very impressive.
In developing a business plan with a client I start with the important, foundation building components which include:
- History ( the story of the owner and the business)
- Next a vision statement is developed. ( a statement , a clear declaration, about where the owner/management want to take the company.
At this point I abandon the traditional business plan sequence and ask the participant(s) to create a list of concerns. We know where the owner(s) came from, and the history of the company; this came out in their stories. With a vision statement in place, I now know where the company wants to go.
I like to discuss concerns while the vision statement, which they created, is fresh in their minds. Because a vision statement contains a stretch factor, I usually ask that they incorporate a no-limit scenario on their dreams. The enthusiasm that created the final vision statement now turns into defining obstacles/concerns that have to be overcome in order to make the vision a reality.
After the concerns are prioritized, we go back and attack the next section of a typical business plan:
- Strengths and weaknesses; this list is to include the strengths and weaknesses of the owner (s) and of the firm.
A typical business plan will take between 8 and 10 hours to complete. The four parts of the plan and the list of concerns may have taken 3 to 4 hours to develop. This first part is a new, and in most cases, very exciting and revealing internal (past) and external (future) look at the company.
An action plan can now be developed, one that makes every day a step towards achieving the vision. The strengths and weaknesses tell us what we have to build on and what we have to change. The rest of the formal plan is integrated into the action plan and includes resources, risks and threats, and strategies. The plan is now a living document with time frames, expected results and accountability.
You have to have vision. It’s got to be a vision you articulate clearly and forcefully on every occasion. You can’t blow an uncertain trumpet. Father Theodore Hesburgh
Nick J. Petra CFP