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I know what you're thinking when you read the headline of this article—easier said than done, right. I hear you. But if you are starting a contracting business or are already running one, you are actually "saying" your business plan, or at least components of it, every day. Check this out:
The Conversation
Me: "Hi Joe. Heard you are starting a new business. What kind."
You: "Oh, hi, Jim. John and I are going to start up our own contracting business that appeals to the green consumer. We're going to use very low-VOC adhesives and finishes, and sustainably harvested wood, and we're going to use the latest dust containment systems."
Me: "Sounds good. Where are you going to get the wood."
You: "There's a guy just outside of town who has a small mill with wood from a sustainably managed property. The price is pretty comparable, but we're going to charge a premium. My father-inlaw is going to front us the money so I won't have any interest on a loan to worry about, either."
Me: "Sounds like you found a niche. How many jobs can you get in a year."
You: "We've already found six homeowners who want a 'green' floor, and I think if we get our name out there and the economy rebounds, we have a really good chance of making some money."
Let's look at what was said. You identified your:
1) business, 2) management team, 3) industry, 4) business's focus (your niche), 5) customer profile, 6) vendor profile, 7) pricing strategy, 8) market research, 9) growth plans.
You probably "say" your business plan every day, you just might not be getting it down on paper.
Meat on the Bone
With the addition of a few other elements, you've got yourself a basic business plan. A basic business plan should have at least seven major categories; in our brief conversation, you identified components of all of them: 1) Executive Summary, 2) The Company, 3) Products and Services, 4) The Market, 5) The Strategic Plan, 6) Management Team, 6) Financial Plan.
Let's Get Started
OK. You know you need to get a plan done because: a) You want to borrow some money from a bank; b) you're talking to an investor; c) you know it's just good business. But, for some reason, you are stuck. Don't worry, try this: Write each one of the components down at the top of a separate piece of paper, or at the top of seven pages on your computer. Then have "the conversation" with yourself. Yes, out loud. As you do, write your answers down in the appropriate section—even just one sentence. Don't worry about quality right now. Congratulations! You've started your business plan.
Planting Seeds
Think of the first words as seeds. As dumb as you may think they are at first, you are going to grow your finished business plan.
Write something down in each section as often as you can—even if it's just a little bit every day. Don't worry if what you feel like writing doesn't seem to "flow" with what you have already written. One of the most interesting things is that sometimes the last thing you write will go at the very beginning, and you may put the first thing you ever wrote in the conclusion. So don't worry about order at first. Just start writing.
Don't Make These Mistakes
There are three common mistakes when forming a business plan:
1. Waiting until you need it. You know your banker is going to ask for it eventually. And the loan officer will ask for it at the precise time you need the money. Which means that you won't have the time, or cash flow, to wait until you can create a business plan from scratch.
2. Waiting until you have the time. If you are like most people, you are already wearing eight hats at the same time. When are you going to have the time to just sit down and produce a plan. If you start now, using the incremental method, before long your business plan will be done.
3. Making it harder than it has to be. Determine whether the problem is the issue at hand (the business plan), or the process (getting it on paper). Identify where your business plan is stuck. You might find you are making it harder than it has to be.
Write this on a rock ... You know the plan. You're the expert. Focus on the process: The way you organize, focus and attribute the time to producing your dream on paper. Here's the payoff: When your plan is done and on paper, others, including your banker, your partners and your employees, can use it to help you. Sounds like a plan to me.