I have needed to write a business plan for months but have no idea how to get started. I have done a little studying online and came across a business plan template through a company. It costs $97 and allows one to fill in blanks to complete a plan. Sounds like a good idea to me. What do you think? — Lincoln
I would suggest determining the purpose of the business plan and specifically identifying individuals you are trying to convince or inform. Why are you writing this business plan and what information do they need? I know it may sound like I am dancing around the question, but different parties want different information concerning your business. Determining who will analyze it will help in determining the format tremendously.
There is not a standard way to write a business plan. Similar to running a business, writing a business plan can be done a million different ways. There is no single business plan format to accommodate all parties. So the biggest factor in writing an effective business plan is the amount of information you know about the reader.
If the business plan is for yourself and you feel that this template can help, then by all means use the service. If you intend to apply for a loan from a bank, knowing the bank's requirements and concerns is essential in convincing them that your business will be a success and worth the risk. A hint: Banks deal with numbers; they want quantifiable information; be liberal with the use of percentages. If you are going to approach Grandma and Grandpa for funding, they might be a little less numbers oriented. You get the idea.
I keep hearing people talk about working capital. What is it and why is it so important to my business? — Grand Island
Working capital is a term that's used in the business, finance and lending worlds and has different meanings in different settings. I have heard it used to explain the extra money a business has on hand beyond its debt. Some use it to explain cash on hand beyond the cash flow of the business. Others use it as a loose term for extra money available for whatever the business needs. I explain it as a business's extra cash on hand, beyond any immediate business debt that is due.
Regardless of how it is used, working capital is accessible cash for the business for business use. The term “for the business” is essential; the “working” portion of working capital is that the money is available to keep the business working. Some say the No. 1 reason why businesses fail is because of cash flow management. Whether you use the term cash flow, working capital, capital, money on hand or cash available, I think it is pretty obvious why this is important for your small business.
Several successful business owners got started without a business plan. Why do I need to create one? — Lexington
You don't. There is no State, Federal, or Divine Law requiring you to have a business plan. That doesn't mean it is not a good idea. Big Brother is not coming to your door auditing your business plan, and just because you have a business plan doesn't mean your business will be successful. The only true indicator of a successful business is George Washington's green picture in its pocket. Plenty of successful businesses have started with no formal business plan.
That being said, capitalism requires capital and unfortunately the statistics show that the majority of startup small businesses are not successful with obtaining and generating capital to be sustainable for the long term. This means that outside help is needed and, although this help is available, it is challenging for anyone beyond you to understand your business without having some semblance of a plan or narrative.
Whether it is a lender, investor, family member or service provider (like me), a business plan will clearly communicate your business and its vision. A plan allows your communication to be clear, consistent and well documented in reflecting the business's goals, purpose, functions and systems. If you don't need outside help, great! But if you find yourself needing assistance, a business plan will help.
Zack Zimmerman is the associate director of the Nebraska Business Development Center in Lincoln. The lead center is at the University of Nebraska at Omaha, but there also are centers in Lincoln, Wayne, North Platte, Kearney, Chadron and Scottsbluff. The centers receive funding from the federal Small Business Administration and are intended to help start, sustain and grow small businesses. If you have a question about creating or growing a small business, email email@example.com.