What a "formula" is, how you make it, and why you need it for your own creations.
How To Write
Your Most Important
Business Plan Ever
Writing A Business Plan
For Yourself -- Before You Need Money
Suppose you needed money for your business, a business you had developed over a period of several years. You know that when you seek investors they will want to see your business plan.
Now suppose, right at the beginning, before you were ready to look for other people's money, you wrote a simple, very simple, business plan. Then, year after year, you revised that plan based on what you had learned during the past year about your market and any new opportunities you had spotted.
Now when you present a "professional" business plan to potential investors you can also show them the simple, perhaps one page long, business plans that have guided you to the point where you are successful enough to attract other people's money. You can show them that, year after year, you have followed these plans and, for the most part, achieved the benchmarks they describe.
Impressive? You bet. Now, from the investors' point of view, they are looking at a person who makes plans and accomplishes what they set out to do. Your new, "professional" business plan gains a high level of credibility. Investors can trust your "numbers" because you have given them proof that you can achieve what you project.
What does it take to write a simple one or two page business plan you can hang on your wall and refer to daily, to keep your efforts focused? Here is a simplified format you might find helpful. It is for your benefit, for your business, before you need outside money.
A Simple Business Plan
Part I -- Your Circumstances
Investors want to know what kind of person you are, whether you have the background and the ability that makes you a good candidate to carry out your plan. They will also want to know something about executives who are part of your organization -- their background and skills -- and what your situation is in regards to employees. Are they able? Will they stick with you?
But you aren't writing your plan for investors and there's a good chance that, aside from yourself, there are no executives and no employees. So you can skip Part I, yes? No!
You are writing this for yourself but what you write here can be a great help to you in your planning, if you are honest.
So let's talk about your "circumstances." What are they and what is important to tell yourself about yourself?
Are you qualified to do the job?
Experts in writing business plans suggest you leave the stuff about yourself until last. Get the rest of the plan down and then write about yourself, how qualified you are to carry out your own program.
But here, let's put these qualifications first. After all, this business is about you so it is useful to probe your qualifications, right from the beginning. The qualifications you need to list here are qualifications you need to accomplish the goal set forth in Part II following the procedures set forth in Part III. But let's look at some of the potential "personal circumstance" requirements for launching a successful perfume business.
- Money, enough to get started
- Marketing skills, experience
- Good nose for perfume
- Well organized
- Able to follow a plan
- Money, good at managing it
- Good at working with people
- Good graphic design sense
- Good problem solver
- Can dream big dreams
- Bold and fearless, but not reckless
- Practical but willing to take calculated risks
- Good reputation with others
- Creative problem solver
- Can "sell" ideas and products to others
- Can work effectively in the space available
Now add to this list all their opposites.
These are some of the personal circumstances, character traits and resources that might be required in your business. It is very important that you do a careful and honest self-analysis because if you don't, your business plan will be weak, right from the beginning. (Weak plan = weak results.) You could, by a dishonest evaluation of your own circumstances, develop a business plan that will be impossible to execute.
It is also very, very important to note that if, in your self-evaluation, you find qualities in which you are lacking but will be needed for your success, you can work on them, put your heart and effort into it, and you might discover through your motivation, you can overcome personal weaknesses and, with diligent effort, turn them into strengths.
Part II -- Your Goal, Carefully Defined
It doesn't hurt to think big, as long as you are able to lay out a step-by-step program to reach your big goal. The key is that each step in the ladder must, itself, be defined and workable, by you.
If you have a big goal, keep it in front of you. And include it in your business plan. After all, this one is for your use alone. But while it is good to clarify your big goal, it is important to also set a more moderate goal that you have the ability to achieve with resources you currently have available or can obtain. This gets you started. If you are thinking big, think of it as the first stepping stone toward reaching your big goal.
Your immediate goal
Your immediate goal must be carefully defined. You must be able to look at your business daily or weekly and know whether you are making progress or not. Ask yourself very specifically, "What is it that I want to achieve?" Your goal may look something like this --
- "My goal is to sell 10,000 bottles of my own perfume"
But that's a bit vague in several ways. Let's refine it a bit --
- "My goal is to sell 10,000 bottles of my own perfume between now and this date two years from now"
Getting better. But let's go a step farther --
- "My goal is to sell 10,000 bottles of my own perfume at a wholesale price of $17.50 per bottle within two years"
Now we've got both time and money, two years and $175,000 in sales revenue. The business is beginning to look interesting. You've got a clear target. You've given your perfume a price point. You've given yourself a time in which you expect to achieve your goal. Now comes the heart of the matter -- the "how" of the business -- the way in which you will achieve your goal -- the day to day steps.
Part III -- How I Will Do It
Let's keep our discussion focused on perfume and on the goal we set in Step II. You need a plan to sell 10,000 bottles of perfume at a wholesale price of $17.50 each in the next two years. This won't happen by magic. Here you've got to lay out a very practical and realistic plan that will be within your ability to execute.
This plan, to work, cannot just be something you pulled off the internet and copied. This plan must relate to you and your situation and how you will sell perfume. This plan, to be worth writing, must describe the special opening you have discovered that will be receptive to your fragrance. In the vast, highly competitive, universe of people spending money, you have to locate and describe a niche, a profitable niche, in which you can establish your business profitably.
So as you review the list of required actions, don't just plod though and make up stock answers. Give the "selling" issues thought -- perhaps days or weeks of thought. Dream up something special. Then try to find a way to put your special concept to the test, in the real world, without spending a lot of money. It's not easy but it is essential.
Before you can lay out the steps you will follow you'll have to assemble some facts. Some of these facts may already be at your fingertips. Whether or not the facts you need here are at your fingertips, you'll want to double check ALL the needed facts. In short, you're going to have to do some research. Romy Schorr has a good article on this on the Ladies Who Launch website.
"Research" isn't a dirty word. It simply refers to the process of acquiring the facts you need to create a sound business plan. In our case here, let's look at the "facts," the information that we need to gather up. Then we can look at how we might acquire this knowledge.
Steps we will have to take to reach our goal --
- Develop a fragrance.
- Develop the packaging.
- Produce the product, the packaged fragrance.
- Pay the expenses of having the fragrance produced.
- Develop a distribution plan - where will our perfume be available to consumers?
- Develop a marketing plan - how will we get customers into stores where our perfume is available and get them to buy it?
- Pay the expenses associated with our marketing and distribution plans.
- Develop an administrative system that can control production, marketing and distribution.
- Pay the administrative expenses involved.
- Find a workspace for office and warehouse use -- we need to do desk work when not on the road and we need to warehouse inventory, not yet in distribution, plus have space for returns which we may be able to recycle.
- Pay for the workspace.
Now we need to list the obstacles that must be overcome --
- Can we find an acceptable fragrance?
- Can we find someone to make it?
- Can we afford the bottles, sprays, labels, boxes, graphics, and filling we'll need to produce 10,000 bottles of perfume?
- Can we find stores that will take our perfume? Will they pay for it outright or take it on consignment? Can we place our perfume in enough stores to have the potential to reach our 10,000 bottle sales goal?
- What is a realistic expectation of how many bottles each of our stores will be able to sell?
- Can we develop a marketing plan that will produce the sales we need? How will we convince consumers to buy our perfume? Can we develop a "hook" that will give our product a special appeal?
- Can we finance our marketing and distribution plans?
- Can we set up a simple administrative system to manage our project?
- Can we afford whatever administrative expenses may come up -- phone, internet, staff, auto expenses, warehouse, office expense.
- Can we find, or do we have, a suitable workspace from which we can launch this project?
You've probably noticed by now that the "how I will do it" section is a big stumbling block. This is what prevents people who want to sell their perfume from selling it.
But the truth is that lots of people -- even people who have never sold perfume before, ARE selling their perfume successfully. There are reasons why these people can be successful. To go into this a bit deeper I've added FOOTNOTES to this article.