Saturday, September 15, 2007

Business Plan the Easy Way

This article was written by Hillel Pitlik, SCORE Orange County Management Counselor

Frequently, our SCORE clients start to write a plan without having gone through all the preliminary thinking needed to answer the many questions that surface during the planning process. I’m reminded of the definition of a lecture by a college professor. “A lecture is the process of the professor transferring the ideas in his lecture to the notes of the student, without passing thru the brains of either.” I submit that a method that allows for exploring the questions and developing the answers will, in the end, result in arriving at a well thought out plan for the business idea in question.

What is such a direct approach? In principle, it is a diary like method that captures the thinking of the prospective entrepreneur step by step. It starts by obtaining a ledger book with non-removable pages.

Start the process on the first left hand page of the diary. In 150 words or less write your business idea or description. To the left of the entry enter the date. The left hand pages are reserved for questions that arise during the process; the right hand pages are reserved for the answers, To the left of each question (on the left hand side) should be date of record. On the left hand page to the right of the question should be the projected date when you will have the answer to this question. When you answer the question, date the entry.

Each time a question occurs to you enter the question. As answers are obtained they will appear opposite the question they refer too. As the process progresses, answering of the questions may beg still other questions, and so forth.

Simple questions such as: “Who is the competition? What resources will I need? Where should I locate the business? Is my personal status such that embarking on the enterprise is reasonable? Etc. must be answered.

In addition, I recommend that you periodically, (bi-weekly) rewrite the business idea without reference to the original statement. Then compare the two, to see if the business concept has changed as the question/answer process has proceeded. Becoming aware of the subtle changes in the idea may well lead to a better business in the long run.

Many of the questions will deal with financial issues that must be answered with spreadsheets and cash-flow projections. Pasting in such entries is encouraged. Thus, the diary is the embodiment of the evolution of your business idea from start to Business Plan.

You should be aware of how successfully you have adhered to your question answering schedules. This self scheduling method will keep the process moving forward apace. In addition, it is beneficial to reread the diary periodically to assess your basic progress toward getting the business started.

The actual Business Plan is then, simply, an extract of the research that you have conducted thru the diary. Viola, that wasn’t so hard after all.