A must-read for all business owners
Seven Secrets to A Solid Business Plan
Starting or running a business without a plan is like climbing aboard a whitewater raft without a life jacket. You'll probably get down the river just fine, but at what cost? Unless the river is a total float, you run the risk of falling overboard and suffering the consequences. And just knowing this can create anxiety. So why take that chance?
The same is true when you start a business. You can get by without a plan, but your job as an entrepreneur and business owner is made harder due to the lack of clear direction and the accompanying anxiety.
Many entrepreneurial physicians find the idea of writing a business plan daunting. It smacks of a skill set they’re not sure they have. So rather than owning up to this lack, they prefer to fly by the seat of their pants and make it up as they go along. It’s how I functioned in private practice!
In my series of interviews with many accomplished physician entrepreneurs, one of their keys to success was to engage in a planning process.
Where do you begin?
I've identified 7 secrets to guide your thinking as you begin planning your business’s upcoming year.
1. Why plan?
It's valuable to understand why you are writing a business plan. Perhaps you need to create staff alignment within your business. Or greater accountability from your business’s managers or supervisors. More than anything else, you probably want results.
A concise business plan allows you to communicate your essential business details to potential partners, investors, colleagues and employees. It also helps you prioritize -- an essential activity, given the array of pressing issues and alternatives a new entrepreneur faces. And finally, it forces you to define the results you are seeking and the strategies to accomplish them.
2. Envision the future
What are you building with your company? A business plan begins with your Vision - a description of a future state towards which you're headed.
Define the time period covered by this business plan. State what your reach will be -- will you be local, regional, national or global? What will your annual gross revenues be by the end of that time frame? What kind of a company will this be, and what will you offer?
3. Tell us why you exist
Why does your company exist? What benefits will your customers receive?
A Mission Statement speaks to your timeless purpose -- it justifies your existence and why you're special.
A powerful Mission Statement captures the essence of your purpose in seven words or less, and sticks in the listener’s brain like a limpet to a rock. Who can forget Nike with its "just do it" or FedEx’s “When it absolutely, positively has to get there overnight"? This is the kind of punch you're looking for.
4. You manage what you measure
Well-run companies and small businesses thrive on the belief that what can be graphed, using numbers, can be managed. Whether its profitability, revenues, numbers of sales, costs, personnel turnover or operations, your business plan’s Objectives are powerful tools.
A typical objective might be Increase gross revenues from X to Y.
5. With what will you build it….?
Like the song "There’s a hole in my bucket", there is a logic that needs to be followed in order to build your business. Strategies describe in broad terms how your business will be built and what will make it successful of the time.
Strategies describe your business model and establish your best practices. In doing so, they provide a framework for some of your key decisions, while supporting your objectives.
An example of a strategy is: Create weight management service line with group coaching program, meal replacement products and online progress reports (Note -- this is one way to meet your gross revenue objective).
6. Your meaty projects
Once you have established your Objectives, which are in turn supported by your Strategies, you then need the Action Plans to support your strategies.
An action plan is not a to-do list. Instead it defines the larger pieces of work or projects that need to be completed in the next 12 months, by quarter. An example might be: Roll out ABC Weight Management Program by March 15, 2008 (this is the project that will support the strategic plan above).
7. Put it out together on one page
A well written business plan expressing a Vision, a Mission Statement and a series of Objectives, Strategies and Action Plans, can be captured concisely on one page. This valuable tool alone will clarify your businesses direction and activities for the next one to three years.
If a business plan is needed to raise capital for the business, the one page achieved through this exercise will serve as a compelling Executive Summary, and when backed up by financial details, a marketing plan, and a description of the management team, will provide the information needed by the potential fund source.