Dutch Vander Laan-Speaker

October

The Business Plan-The Key To Success

By

Cathy Smith

The importance of writing a business plan was the focus of the Phoenix Chapter IAA meetings during the month of October.  Dutch Vander Laan from East Valley S.C.O.RE. 402 counseled inventors on how to write a business plan.

According to Mr. Vander Laan, “Operating a small business without a business plan is like driving across the USA without a map.” 

A business plan is essential because it helps you to see who will be traveling with you, what will be needed for your journey, where you will be traveling to, what possible road blocks you might encounter, and how you can overcome them.  A good business plan will tell you if you should even be taking your journey.

So, where do you begin?

You begin by sitting down with pen and a loose-leaf notebook and you brainstorm.  Divide your notebook into the following sections. 

·        General brainstorming

·        Cover Page

·        Table of Contents

·        Executive Summary

·        Operations

·        Marketing

·        Financial Management

·        Appendix

 Then you dive into each section, one at a time.

            First, you need to do some general brainstorming. Think about the following topics in relation to your product or business and write down everything you think of.  This will be some of the information you will refer back to when writing your plan and when brainstorming the other sections. 

·        How will your business be operated?

·        How will it be managed?

·        How will it be capitalized?

·        What are your short-term goals and long-term goals?

·        What are the immediate profit opportunities?

·        What are the immediate operational shortfalls?

Then, you start with the cover page.  What information is included on this page?  Included on the cover page should be identification information about the business.  Contact names, business address, phone numbers, and date the plan was prepared.

            Next, you can brainstorm a tentative table of contents.  This would be a rough draft outline of all the documentation and topics covered in your plan.  This rough draft outline can serve as your checklist when you start to compile and collect all your information.

            Third, you create a section for your executive summary.  An executive summary is your fifteen minutes (or more) of fame.  This is the section that sells you and who you are.  In this section you discuss your skills, qualifications, and experience.  You also discuss the advantages of your product or business over your competition.

            Your fourth section will discuss operations.  In this section you will need to describe the company’s structure.  Include job descriptions of the key personnel, what other personnel may be needed, how the company will be run on a day to day basis, what is required to produce your product, how will delivery and service be administered, the need of insurance, lease or rent agreements, and any other issues that may be relevant to your operational needs.  Realistically projecting your operational needs up to five years is a good idea.

            Marketing is the next section of your brainstorming notebook.  This is the section of your business plan where you get to show and tell. This is where you describe your product and you explain why there is a need for your product.  You need to tell who your target market is, where they are, and how large they are.  You will need to get the demographics.  You have to have the stats and the facts.  Then, brainstorm your marketing and advertising campaign.  Have you thought about price?  Is what you have in mind realistic with the current market?  Do your homework.

            Money.  Yes, you read this right.  Your next section deals with the meat of the matter and the reason why you started this whole process.   We’ve actually saved the best for last (like the chocolate cake after dinner).  This is the section where you get to realistically plan how rich you are really going to be.  In your financial management section you need to develop a monthly operating budget for your first year, an expected return on investment, and monthly cash flow.  You will need to provide projected income statements and balance sheets for two years.  And you need to show your personal balance sheet and method of compensation.  Decide who will keep and maintain your accounts.  Lastly, think of any problems that may arise and how you will compensate or overcome these problems.

            Your appendix will be the section of your plan where you put anything that is helpful to your plan but doesn’t really fit in the above sections.  This should include all the material that supports and explains the statements and conclusions you have made in your report. 

            Now, you have a notebook full of information.  The next step will be to sift through this information, combine it, consolidate it, and yes, even delete some of it, until you come up with a business plan that reflects your vision and why your vision will be successful in today’s world.  The key here is to keep your plan as simple and concise as you can without leaving out any of the key and crucial information that will sell you and your product to the highest bidder.

            With your plan complete, you can now go back and re-write your table of contents.  You will begin with the executive summary and end with the appendix. The table of contents should lead the reader to each document and section of your plan and you should number the pages in order. 

            Do one last editing and then put it all together in a professional binding. 

From your cover sheet to your appendix you now have a business plan.  With a business plan in place, you are now, “The captain of your ship and the master of your destiny.”  You have the best tool you can have to make the most rational and logical decisions about your product, your business, and your future.