The Time Has Come to Start My Company
By: Jeff Lippincott
So you have been working in a profession for 20 years and you think it is time to leave the practice and start an entrepreneurial endeavor? This could be a very good move on your part if you do it correctly. The main thing you must keep in mind is that a failure to plan is a plan to fail. Yes, in my humble opinion EVERY entrepreneurial endeavor requires the investigation, research and writing of a sound business plan. After the plan is done, then the investigator, researcher, and writer is an expert on the entrepreneurial endeavor he or she wants to start, and they more than likely will be successful at it.
So many wanta-be entrepreneurs try to start an entrepreneurial endeavor by just winging it. Or they sometimes do some investigation, some research, and write a sketch of a business plan, but the resulting business plan is not sound or complete. As a result, the wanta-be entrepreneur never becomes truly expert at how to start and run the business they want to create. They fail to understand their company's market (competitors and customers). They fail to understand how marketing efforts need to be organized and performed. And they usually fail to understand how much start up capital is necessary so the company does not run out of cash before it becomes a money tree and provides positive cash flow and sizeable profits for the owner or owners.
You must get it out of your head that a business plan is just something you have to create in order to qualify for a business loan. While it is true that a business plan is necessary in order to qualify for a business loan, it is NOT true that the primary purpose for creating such a document is so your business can qualify for a loan. The primary purpose of the business plan is to force the wanta-be entrepreneur to become an expert on the company the business plan is written for. By doing the investigation, research, and writing AND MAKING SURE THE PLAN IS LOGICAL AND OVERLAYS A SOLID BUSINESS MODEL you will become an expert in your new venture before you start it. Then you can use what you have learned by writing your plan and what you have written in your plan to help you forge ahead and actually start your new company.
So how do you write a business plan? Simple, the first step usually is to go to your public library and check out three books on business plans. Each will have a template or outline your business plan should follow. They will probably all look the same and include an Executive Summary, Nine Interrelated Topics, and Appendices, as follows:
I. Executive Summary
** Very short summary of material included in body of points 1-9 in the plan. If it is longer than a page and a half, then it is too long and detailed. See nine points included under Table of Contents below.
II. Table of Contents
1. Overview of business in general terms
2. Sources of revenue streams
3. Market examination
4. Marketing plan
5. Overview of operations
6. Management & reporting systems
7. Key people
8. Potential problems & solutions
9. Financial information
III. Appendices
A. Sketch business plan of key competitor 1
B. Sketch business plan of key competitor 2
C. Sketch business plan of key competitor 3
D. Sketch business plan of key competitor 4
E. Flowchart of operations
F. List of key suppliers
G. Organizational chart
H. Job descriptions
I. Resumes of key people
J. List of assets (including intellectual property & trade secrets)
K. Descriptions of assets
The second section [II. Table of Contents] should be between 25 and 35 typed pages in length and should make liberal cites to the appendix material. Appendices A-D should be about 10 typed pages long each and should include points 1-9 that all business plans include. The first section [Executive Summary] actually need never be written unless the business plan is to be used to obtain a loan or some other outside financing. However, writing an executive summary will help the wanta-be entrepreneur get a better handle on what his or her new company is really all about and what the "elevator speech" will sound something like. So it is a good idea to write one for your business even if you are planning to bootstrap your company to success. Right Click Here to download a PDF file I've created that goes into a little more detail as to what your business plan should include. And Right Click Here to download a PDF I've created to be an evaluation form for a sound business plan.
The business plan has to be at least 25-35 pages long because the idea of the business has to be fully developed. The nine different parts have to fit together. And the way they fit together has to make sense. If the plan is shorter than 25 pages it is highly unlikely that someone can read it and determine how to proceed and make the company begin, grow, and become profitable. If it is longer than 35 pages, then there is just too much detail - most of which would probably be imaginative rather than something realistic. Feel free to make the appendix material as long or short as you like. But don't make it too short. A good business plan will rely heavily on the content included in the appendix materials.
The thing that stumps so many wanta-be entrepreneurs and causes them to fail or not be particularly successful is Topic #4 in the list of nine business plan sections. That's correct, the Marketing Plan (or lack of one) is what typically causes so many people to screw up when starting a new venture. And it often causes existing businesses to fail because marketing efforts must be updated and changed as times change. And people who have never run their own shop often don't know what their marketing efforts should try to achieve. For example, the other night I had a SCORE client who had worked for 30 years as a controller (chief bean counter) for various companies. He figured he could list that work experience in order to "prove" his expertise. Similarly I've had accountants with their CPA credentials and lawyers with their lawyer licenses expect to list their CPAs and ESQs in order to "prove" their expertise. Their way of thinking is wrong. Clients don't really care about credentials. They want to hire people who are credible. They want to hire people who are expert. They want to hire people who are in demand. Thus credentials are not all that important when it comes to marketing. What is important is having written a book or books. What is important is having created seminars and workshops AND having presented them to customers and potential customers. Some of these seminars and workshops can be short and provided for free at public libraries or at professional association meetings. Some can be longer and provided for a fee. But the more of these seminars and workshops provided, then the more opportunity exists for the provider to get testimonials that explain how credible and expert they are.
So just about every consultant or coach who wants to be successful and create a killer marketing plan will need to write books, create seminars and workshops, and collect loads of testimonials from the readers of the books and participants in the seminars and workshops. And every consultant will have to have a Web site for his company where the books, seminars, workshops, and testimonials are eloquently presented so any visitor to the Web site will quickly come to believe that the consultant is credible and expert. Some Web sites I like that do this are: www.jblockinc.com, www.mlongconsulting.com, www.stephaniechandler.com, www.ebbweb.com, www.thetradeshowcoach.com, www.surpassyourdreams.com, www.themfactor.com, www.gropenassoc.com, www.cpgfundraising.com, www.qpcteam.com, and www.tracycoenen.com. I highly recommend you study these sites. Interestingly, they are all women entrepreneurs. But in my humble opinion they are doing things correctly when it comes to marketing themselves. They write, they speak, and they have Web sites that showcase that they are credible and expert.
You might be saying: "This guy is out in left field. It's almost impossible to get published. How am I going to write a book? And how am I going to find a publisher?" Well, your concerns might have been legitimate not too long ago. But today it is fairly easy and inexpensive to self publish using Print-on-Demand (POD) publishers. One excellent book that lists the many options you have regarding POD publishers is "Top Self Publishing Firms" (ISBN: 1440407541). And if you want to learn a little more about POD publishing in general, then consider taking a look at "POD Publishing" (ISBN: 0972380132). It's a little dated, but well worth the read. Also, regarding writing your book and getting it published via POD I highly recommend you read "The IndieAuthor Guide" (ISBN: 1434857689). And the first book I read on self publishing via POD was "Aiming at Amazon" (ISBN: 093849743X). Definitely do not cheat yourself and avoid reading this last one. And what about editing your book so you don't look like a 5th grader writing mere slop? Consider taking a look at "The Frugal Editor" (ISBN: 0978515870) and "Line by Line" (ISBN: 0395393914).
You also might be saying: "Seminars? Workshops? Public Speaking? How am I going to do that? I can't get up in front of a crowd and give a good talk." Again, your concerns might have been legit a while ago. But today Toastmasters International exists. See www.toastmasters.org. Join one or two local Toastmasters clubs and get comfortable (and good) at speaking before crowds. It's fun and extremely inexpensive. You'll also get pleasure helping your fellow club members get better at public speaking. Also, I recommend you take a look at "The Ultimate Training Workshop Handbook" (ISBN: 0070382018) to help you when creating the seminars and workshops for your company.
And what about how to build a killer Web site? Well, for starters, revisit the eleven sites I cited two paragraphs above. You should seek to create a site for your company that takes the best of the best from these eleven sites. You will want your book featured on your home page. You will want the calendar for your seminars and workshops featured on your home page. And also you'll need a page for your eBooks, i.e., books you don't publish via POD but that you reduce to PDF files and sell online. You will want a page for testimonials. You will want a page for Contact Me. And you will want a page for About Me. There must be a page listing your services. And a page listing online articles you post regarding what you do. It's a good idea to make a subfolder on your site where one of your blogs is housed. And I recommend you sign up at Blogger.com for a free blog. And sign up at Wordpress.com for another free blog. These two free blogs will help direct search engine traffic back to your company's site. The entries you post in all your blogs will build credibility for you similarly to writing articles, books, seminars, and workshops. And I recommend you join LinkedIn.com, Facebook.com, and Twitter.com. Don't just join, but get active, too. Make contacts there and build networks. This is another way to get known. And getting known is the secret to getting customers and testimonials. I do not recommend a MySpace.com account.
Do you need a Web designer? I don't think so. If you are an entrepreneur today, then you must be computer literate. Purchase either Adobe Dreamweaver or Microsoft Frontpage to build your Web pages using WYSIWYG (What you see is what you get). I've been using Frontpage since 1998. But I hear Dreamweaver is better. And you'll need Adobe Photoshop for the image files your site will need. And Adobe Acrobat for creating your eBooks and other files you want to include on your Web site that are not HTML. I think you will get something out of "Web Business Success" (ISBN: 0974924504) and "The Web Savvy Writer" (ISBN: 097783042X). Consider getting them and reading them. You really should get to know the software programs so you can update your Web site on the fly. Your Web site is an integral part of your marketing plan - or should be. It helps you build credibility. It helps you showcase why you can legitimately claim to be an expert. It makes it easy for anyone with your business card and an online connection to learn ALL about you and how to hire you. And it helps anyone with your email address (if you have the correct email address design) to learn all about you and how to hire you. With your business card floating around at functions, seminars, and workshops. With your email address floating around on blog postings and general emailing you do. And with your online presence indexed in the major search engines, your Web site should get a lot of traffic from people interested in learning about you and how to hire you. Now that is what marketing is all about!
So what else do I have to worry about? Yes, you guessed it - the other 8 topics you have to cover in your business plan. As a consultant you are going to wear many hats. And I cannot cover them all in this article. However, you need to understand what service you will be providing and how you will provide it. That usually comes with training, work experience, or a combination of both. Consider taking a look at the following books to help you come to some sort of concept for your company. See "Four Steps to Building a Profitable Coaching Business" (ISBN: 0595296602), "Start Your Own Coaching Business" (ISBN: 1599181827), "Coaching Millions" (ISBN: 0979293200), and "Start Your Own Information Marketing Business" (ISBN: 9781599181745). And you need to think about what choice of legal entity you will use for your company. In my humble opinion it should either by a single-member limited liability company (LLC), or a multi-owner C corporation. Consider getting a copy of "Structuring Your Business" (ISBN: 1593371772) to learn more. The LLC route is the cheapest way to go to get a professional name and image. You'll limit your liability and you can (and should) call yourself "President" on your business card. Not owner. If you have partners or co-owners, then the cheapest route is to form a corporation. You'll limit your liability and you can (and should) call yourself "Chief Executive Officer" on your business card. Not owner, and not president.
Most of the appendices in your business plan are self explanatory. But I bet you are wondering about appendices A-D, right? Well, remember I said you have to do investigation and research in order to write your business plan? Yeah, I said that! You start that work by examining your the competitors that make up the market you plan to have your company compete in. For example, you plan to open your shop in New Jersey and to provide fundraising consulting services. Will you be providing your services just in New Jersey? Or will you be providing your services regionally? Or how about nationally? For simplistic sake lets assume you plan to offer your services just in NJ. And there are four dominant fundraising consulting firms serving NJ. The first appendix in your business plan is going to be a sketch outline of one of those four firms. The second appendix is going to be a sketch outline of another and so forth. You may have only three such appendices. Or you might have 8 or 9. The critical thing to keep in mind is you MUST have a very good understanding of your competitors if you are going to be able to compete with them and take a share of their customer base. So study their marketing techniques and tools. Study their Web sites. Study their offerings. Study their pricing. You name it, then learn all you can about it. Read between the lines. Some information you get will provide you with enough information to make guestimates as to what the competition is doing. This is the way you put together the sketch business plans of your competitors.
Why are the sketch business plans so important besides understanding the competition? The answer is simple - you need the sketches so you have models to cut and paste from when writing the master business plan for your company. You don't want to reinvent the wheel from scratch - nor should you. The same way you should design your company Web site is the way you should design your company business plan.
That about concludes my coverage of the basics to getting your company started and off the ground. Do not hire a Web hosting service until your business plan is done. Do not reserve a domain name. Do not form an LLC or corporation until your business plan is done. Create the plan FIRST! For all you know the plan won't be able to be made sound. Thus the business should never be started. Only get started after the plan is done. Otherwise you very well might waste time, money, or other resources unnecessarily. Good luck! And keep those email questions coming my way through the SCORE email counseling feature SCORE.org provides.
Copyright © 2009 by Jeff Lippincott. All rights reserved.