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At BizPlanIt We are dedicated to providing actionable insight for small business owners.

Our goal is simple. To help you as an entrepreneur or small business owner navigate through the treacherous terrain of starting, planning, funding, growing, and managing your company.

We will regularly share with you a variety of information, tools, and resources that will help you not only prepare an outstanding business plan but we hope will have an impact on your company's success.  

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10 Reasons Why Business Plans Are Not Just For Startups

Written by Scott Pollov on Monday, 17 January 2011. Posted in Writing a Business Plan

If you have a great idea for a startup business, you will need to write a business plan to help you attract the capital, people and resources necessary to get your startup off the ground. Some “experts” question whether a business plan is a useful tool beyond this step in a company’s lifecycle.

We here at BizPlanIt, as well as many experienced, successful entrepreneurs across the globe would strongly disagree. We believe that a business plan is a required tool for all companies, even well established, successful companies. Here are ten great reasons why your company should write a business plan today:

  1. In many instances, a company’s financial goals are so ambitious that growth cannot be funded from internally generated cash and therefore additional external funding is required to sustain the growth rate. External funding sources will almost always require an up-to-date business plan.

  2. A business plan that is constantly reviewed and discussed internally keeps the entire management team committed to a common set of goals by forcing executives to reconcile any differences they might have.

  3. All enterprises need a way to communicate vision, mission and values to suppliers and customers. The business plan is the perfect way to periodically keep your most important constituents aware of your goals and objectives.

  4. Markets are constantly evolving. An informed, agile management team will capitalize on this evolving landscape by aggressively making changes to their company’s pricing, packaging, distribution, technology, etc. The business plan anticipates these changes and allows for an easier transition.

  5. In today’s marketplace, strategic partners have become a necessary and important weapon in every company’s arsenal. Strategic partnerships work best when each partner is aware of the other partner’s direction. Obviously, an exchange of business plans is a requisite part of any meaningful partnership.

  6. Your company’s business plan is the best place to showcase your management team. The corporate landscape is littered with companies with great products and huge markets that either didn’t make it or didn’t reach their potential because of a management team that did not have the skills, talent or experience to achieve its goals. Your business plan is a great place to show off your most important assets.

  7. Every enterprise has competition and ultimately, your company’s success will be determined by how you differentiate your business from that of the competitions. Your business plan will explain how you differentiate through better products and services, better technology or perhaps by understanding and caring for the customer better.

  8. Your company’s business plan gives you the opportunity to periodically review your business model…how you make money. Do not let yesterday’s leading edge product become tomorrow’s commodity. Use the plan to anticipate the future and respond accordingly.

  9. Use your business plan to periodically review your company’s goals. Make certain that they continue to be achievable or, make sure that they continue to be a stretch.

  10. Periodically review your plan’s financial forecasts. Ask yourself if they continue to be relevant. Are revenues and expenses tracking? If not, why not? Make changes now.

Indeed, a formal, continuously updated business plan is an important external as well as internal document. Take advantage of its many benefits and let the plan take your company in the direction that you want to go.

10 Rules For Writing a Powerful Executive Summary

Written by Adam Hoeksema on Monday, 30 August 2010. Posted in Writing a Business Plan, Executive Summary

Whether you write your own business plan, or you work with a professional business plan consultant to craft the perfect document, you will soon notice that you will need to change your plan for various purposes.

For instance, if you are seeking a loan, you may want to focus on your balance sheet and collateral. If you are submitting your plan to an angel investor group you may want to focus on growth, market potential, and your management team.

Rather than re-work the entire business plan for each new audience, it may make sense to simply write a new 2 page executive summary highlighting the information most relevant to your audience. As you write your executive summary there are 10 rules to keep in mind. (You can also refer to our virtual business plan template for additional tips and examples)

  1. Know Your Audience – This is the first rule in speaking and writing. If you are applying for a loan your banker probably does not care too much about your exit strategy, but they will be interested in your cash flow projections. Be sure to cater to the needs of your unique audience.

  2. Do Not “Summarize” – Why would the reader want to continue reading your business plan if the whole document was already summarized? Rather than summarize, you should write with the intention to sell. Sell the reader on your idea, don’t bore them.

  3. Leave Out the Company History – If your executive summary starts out with, “12 years ago I had an idea…” your reader is probably already looking for the next section heading. Sorry, but they don’t care. Your company history is important, but not in your executive summary.

  4. Ask Yourself “So What” – Always ask yourself “So What?” Is each statement relevant, and important in communicating your message? If not then change it, throw it out. Every word should be valuable and vital to your message.

  5. One Size Does Not Fit All – If your executive summary was successful in impressing your banker then you should probably change it before you hand it over to a potential investor. Each set of stakeholders will have a different set of priorities and experiences that will give them a unique perspective.

  6. Write NO More Than 2 Pages – K.I.S.S. stands for “keep it simple stupid”. If you can’t convey the essence of your business in 2 pages then you need to simplify. The executive summary should be simple and short, leave the detail for the business plan.

  7. Be Intriguing – Sell. Intrigue. Tantalize. Compel. These are the words that you should focus on in your executive summary. Your goal is to intrigue the reader to ask for more detail or to dig into the business plan. The executive summary should do just enough to get them excited.

  8. Write at a High School Level – You may be an engineer with a novel invention, or a software designer who speaks in HTML. If you are a technician, while you are writing your business plan please come back down to earth and use terminology that the average Joe could understand.

  9. Use Bulleted Lists, Headings, Tables, and Graphs – Everyone likes a picture book. Unless you are writing to an audience full of PhD scientists, make sure to make your executive summary look good. Two pages full of paragraphs will give the reader nightmares about your 40 page business plan. If you went 2 pages without a list, or a graph, one can only imagine how dry your business plan will be.

  10. Leave Out Key Information – The purpose of your executive summary is to get the reader to read on. So feel free to leave out some important details. Even make it clear that the subject will be covered in depth throughout the business plan. Again, the goal is to compel and intrigue the reader so they just have to know more, and leaving out some of the details is an effective way to accomplish this.

These 10 rules will guide you through the process of writing and re-writing your executive summary.

11 Tips For Raising Capital For a Business?

Written by Scott Pollov on Wednesday, 28 November 2012. Posted in Financing a Business

Increase Your Chances of Crossing the Funding Hurdle

It’s common knowledge among most entrepreneurs that raising capital for a business of any kind has been very tough over the past few years. And it seems that even if you’re a startup or small business with the hottest new gadget on the market - finding the angel or venture capital you need can be next to impossible.

The truth is, it has always been tough to raise capital (Well OK… try to forget 1997, 1998 and 1999).  But the fact remains that lenders and investors of all types have been raising the bar higher and higher to decide which businesses get funded and which businesses don’t.  If you look at today’s companies that successfully cross the funding hurdle, you’ll find they often share a number of similarities.  So if you’re about to embark on the road to the capital markets to claim your share of debt or equity, incorporate the following strategies to increase your chances of clearing the funding bar:

  • Don’t request more money than you need.  That’s right, keep your request to just the amount that you need to get the job done properly.  Also remember that more than likely you don’t need “all” the money right now, so think in terms of sourcing capital as you need it.  It’s often better to seek a number of “rounds” or “draw downs” when funds are required and when you meet certain agreed upon milestones.
  • Invest your own money and have something to lose.  Investors and lenders like it when you invest your own money in your project.  They like to know you have something at stake.  It also assures them that your business (and their investment) gets your complete and undivided attention.
  • Don’t ask the source of capital to pay you back.  In the Use of Proceeds portion of your business plan, don’t ask to be repaid for funds you already invested into the business.  It will never happen.
  • Don’t raise money to get rich.  Today’s investors and lenders are interested in funding entrepreneurs who have the primary motivation of building a great lasting company.  Getting rich should be the by-product of great execution over an extended period of time.
  • Make money ASAP.  The days of funding companies that lose money for years are gone.  Building revenues and market share are admirable, but the capital market has learned that the longer an enterprise goes without making a profit, the more unlikely it becomes that it will ever get around to making any money.
  • Have an experienced team with a track record.  You absolutely must have a great product and a market that’s ready for that product.  But investors and lenders frankly aren’t interested in either your product or your market unless they believe your team has the experience to “get the ball across the goal line.”  This point can’t be overstated – great teams get the funding.
  • Don’t compete with the big guys.  No one is going to fund a business plan that calls for a company to take market share away from Microsoft, Cisco, Wal-Mart or FedEx.  It is far more realistic to look for opportunities in niche markets where there aren’t any dominating players.
  • Become number one and stay there.  External sources of capital know that there are tremendous business advantages to being Number One.  When you’re number one, you have more control over pricing, product positioning and distribution channels than your competitors.  And of course, the view from up front is always more enjoyable than the view from behind.
  • Make your product or service patentable.  Investors like products or services with intellectual property that can be protected – it makes it far more difficult for competitors to come along and out-execute you.  If you do have intellectual property, protect it.
  • Invest in engineering, technology, customers and sales rather than marketing.  Investors like to know that you’ll have something to show for the money they invested, rather than just a very clever $5 million Super bowl ad that never really connected with the public.
  • Have a great 5-year business plan.  Investors and lenders don’t read business plans because they want to know what you’re doing and where you’re going.  They read business plans because they want to find out if you know what you’re doing and where you’re going.  Your business plan is a reflection of you, so dazzle your audience with your passion, knowledge, thoughtfulness and vision.  Every great entrepreneur isn’t necessarily a great writer or communicator, so if you can’t write a professional plan to communicate your ideas, get the help of someone who can.

Raising capital is NEVER easy. But, follow these 11 tips for raising capital for a business and it should help you increase your chances of crossing the funding hurdle.  Good Luck!

3 Most Common Pitfalls in Building a Scalable Business Model

Written by Adam Hoeksema on Thursday, 19 July 2012. Posted in Starting a Business

One of the most difficult problems for entrepreneurs is creating a scalable business model. Some business owners work for years building a business, but ultimately run into a roadblock that limits their future growth simply because they didn't start with a scalable business model.

There are a couple of common factors that keep entrepreneurs from creating businesses that can ultimately scale into very large businesses.

  1. Service Based Businesses - This is an issue that I have personally struggled with as I work on developing ExecutivePlan.  Many entrepreneurs, myself included, can get trapped into providing services for clients because it means revenue now.  The problem is, if you are constantly working for an hourly rate by providing a service, you are ultimately limiting yourself.  There are only so many hours in a day that you can work.  You must allow yourself to work on the scalable piece of your business.

  2. Rushing to Cash Flow - Many entrepreneurs can't afford to operate their business for months and months without producing positive cash flow.  Unfortunately, by rushing to generate cash flow you may sacrifice building a scalable business model.  If you watched the movie the Social Network you will know that Facebook waited a long time before introducing advertisements on the platform.  There was a debate whether Facebook should advertise early on or just continue to improve their product and increase users.  If Facebook would have started worrying about cash flow in the first couple years, they probably would not have built the huge business they have today.

  3. One Time Customers - Another issue that can keep entrepreneurs from building a scalable business is a business model that does not have repeat customers.  If you have to acquire a new customer for every single sale, it will be difficult to grow your revenue quickly like you can when customers pay a monthly fee.  Some call the monthly subscription fee model the holy grail of business.  The basic premise is that it is much easier to keep a current customer, than it is to acquire a new customer.  Many businesses are creating subscription models in industries that never offered subscriptions in the past.  Consider ways in which you can turn your business into recurring revenue powerhouse. 

I encourage you to build your business with the future in mind.  Is your goal to create a business that can run without you?  Do you want to create a business that can employ many people and generate millions in profits for you and your shareholders?  If so, then avoid these 3 common pitfalls and build the foundation of your business in such a way that scalability is possible.

Photo Credit: Baha'i Views / Flitzy Phoebie via photopin cc

3 Reasons Why No One Ever Reads Your Business Plan

Written by Adam Hoeksema on Monday, 06 December 2010. Posted in Writing a Business Plan

So you have spent hours and hours writing your own business plan, or maybe you have invested up to several thousand dollars to have a professional help you develop the perfect business plan. Although your plan is of tremendous value to you as an internal road map and strategic guide, a business plan is also commonly used to raise capital.

Now that your masterpiece is done, you have probably started to spread your business plan around to several bankers and potential investors. If so, you will probably start to wonder why no one seems to actually read through your plan. Let me elaborate on three simple reasons why no one will read your business plan.

  • Too Long – If you have to send your business plan in two separate documents because it is too big to email as one single attachment, then your business plan is too long. If you kill an entire tree each time you print your business plan, then again, your business plan is too long. The point is that investors are busy and bankers rather go golfing, so if your business plan is over 30 pages only the most dedicated will even browse through the document. So where might you save some space? I would suggest that you keep your financial section short and sweet. Most entrepreneurs are far too optimistic with their projections anyway, and potential investors and bankers know that. So just include the basics, and be prepared to produce the details if anyone asks.
  • Unsolicited Email – Another good way to make sure that your business plan ends up in the “Deleted” folder is to simply email every banker and investor within a 200 mile radius. Do you typically read a one paragraph email from someone you don’t know? You probably disregard or delete emails from people you don’t know personally. Now just imagine a 30 page email from someone you don’t know. Would you ever, under any circumstance, read this entire email? Work on building relationships before you just throw your business plan around.
  • Executive Summary Fails to Compel and Intrigue – Another reason no one reads your business plan is because your executive summary is not doing its job. The purpose of your executive summary is not simply to summarize your entire business plan – rather it should sell the reader on your business opportunity. Work on compelling the reader to dig into the rest of the business plan. You may need to intrigue the reader with information that is fully discussed in the business plan. Finally, you need to grab the reader’s attention from the very beginning. Hit the reader with a “wow” statement with your first paragraph.

If your business plan has not been finding the results you were hoping it would, make sure that you are not falling victim to these three business plan mistakes. Remember that raising capital takes time, so be persistent and always continue to fine tune your business plan.

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