How do you attract the funds to build your venture? How do you align your team and get everyone moving in the right direction? How do you test if your strategies will get you where you want to go? A good business plan is the answer. More detailed than the strategic plan, the business plan explains the model for turning an idea into a viable venture.
A solid business plan explains:
- Company passion, purpose, and vision (or core idealogy), background, and strategic business model to achieve its mission
- Market need and why current competitive alternatives are not satisfying them.
- Company’s solution, the product and services, offered to solve the unmet need with a sustainable competitive advantage
- Sales and marketing approach to bring the solution to market including pricing, distribution, partnership, and promotions strategies
- Realistic projections of forecasted sales and resulting revenues
- Proforma financial statements showing how the firm makes money, becomes profitable, and makes a full triple bottom-line impact
- Management and human resources available to create and execute the plans
- Explanation of what other resources, financial, human, and otherwise, are needed to succeed
The plan guides the firm’s efforts, ensures there is a solid business to be built, and helps attract resources. At AT&T International as line of business manager, the plans I created convinced the Board of Director to internally fund the effort. At my entrepreneurial venture Radish Communications Systems and with my consulting clients, the business plans are used to attract outside investors. The plan must be professional and comprehensive; otherwise you set the company up for failure.
Critical Mistakes. It is not easy to create a good business plan. Nearly 250 venture capital companies across the US, were asked, “What is the worst mistake an entrepreneur can make when completing their company's business plan?” Eight critical mistakes were reported at http://www.capital-connection.com/survey-worst.html: not clear in explaining the opportunity, unrealistic projections, simplistic assumptions, weak analysis of competition, failure to describe a sustainable competitive advantage, mistakes, errors, and misleading information, overstated management strengths, and incompleteness such as insufficient financial data.
Example. Phil Lyman, founder and CTO of Boundless Corporation (www.boundlesscorporation.com), a Colorado corporation focused on innovative energy storage for high performance systems, wanted to expand into new markets. He made a smart decision—to build a business plan and to get help from TMS to more efficiently do so. He used this plan to attract funding and guide the firm’s operations. Lyman explains, “One of Boundless’ keys to success has been to narrow our focus onto emerging target markets with urgent need for advanced technology. Strategic planning is paramount for establishing adequate focus.” Boundless was a finalist for an Innovation Quotient (IQ) award from Boulder County Business Report. With the right product and plan to bring it successfully to market, the firm augmented government sales with commercial sales of large-format lithium-ion batteries and packs.
Implementing the Plan – Pursue Your Purpose
Establish a strategic plan. Then expand to a business plan. Use them as tools to guide the company and its people. It takes relentless pursuit using a ‘divide and conquer’ strategy, ongoing assessment of progress, consistent team communications, and mid-course corrections.
How to Build a Good Plan?
Combine your vision of what you want with relentless effort to get it. Follow the 4-stage "Pursuit of Passionate Purpose" process. Get help from the right players. Then pursue your passionate purpose! Real rewards will follow.
Theresa M. Szczurek (www.TMSworld.com and www.PursuitofPassionatePurpose.com)