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Christine Syquia, having been through a journey starting and then managing a multi-million dollar accessories business, is about to share with us the entire story of how it all came together.
In this article she talks about business plans, what you need to put in them, and what parts she deliberately left out of hers…
For your average start-up, the thought of sitting down to write a business plan can be overwhelming. Business 101 books suggest writing a business plan before embarking on any business course. How are you going to get to your destination if you don’t know how to get there? I completely agree with this popular saying, but knew that when I wrote our business plan, I would not be following the traditional outlines.
No matter your approach, the act of writing a business plan takes discipline. As a consultant, if I had a nickel for every time somebody told me they wanted to start a new business and were working on a plan, only to find out six months later that nothing had happened, I would be a millionaire!
It is so easy to become overwhelmed by the enormity of it all. I saw this firsthand when a boyfriend was approached by a well-known athlete who wanted to fund his design business and requested that he write a business plan. My boyfriend would come every night and pull out his notebook. He would jot down a few notes and stare at the page… and stare at the page. Eventually, he would go and turn on the TV and zone out. He didn’t know where to start and would just give up!
I have written more than my share of business plans and I definitely have a strategy to completing them. However, although this has worked for me, your business consultant will probably not agree with my advice. So take it with a grain of salt.
When we wrote our business plan for Charm and Luck, our accessory company, we did not delve as deeply into the financials as many plans do. We used our business plan as more of a roadmap and goal setting exercise versus a business document to submit to a bank. We set out our goals and they included getting into various magazines especially the very popular US Weekly, being selected for QVC or HSN, selling $5 million in sales, and going on Oprah. We achieved every goal we wanted except for Oprah.
I knew that if I were to labor over the financials, especially the projections for each year, I would be stuck. Instead I approached writing the plan and completing the financials as goals – merely an outline – and expected to change the plan as we went along.
Why would I base an entire plan off a target I might not achieve? What if I based my numbers assuming I would get into a major department store but they did not like our product? One of my good friends is working on her children’s product line, and she plans to grow her business to be in 1,000 stores next year, an ambitious goal. If she misses her target, she will have labored over her business plan and projections, and only have to recalculate them.
In my first blog post, I suggested course correcting when necessary. When writing a business plan with the financials included, you will likely have to switch gears.
A typical business plan often has these components:
Executive Summary: The background of the principles and their unique talents that they bring to the business.
Market Analysis: A review of the reason why this business has a chance, why there is a void in the market, and how this business will excel.
Company Description: The company name, mission, and identity. What kind of business entity will the company be, where will it be located, and what kind of services will it sell or offer.
Marketing and Sales Management: How the company will sell its product, and how will the product or services be marketed.
Funding Request: If requesting funding, then this section would list what type of financing you would like or what type of equity stake partnership would be agreeable to you.
Financial: The financial section is where you list the projections for Year 1-5, along with the monetary investment supplied by your partners.
As I stated earlier, in this section I outlined our financial goals – but I did not do the cash flow exercise of putting in our rent, utilities, press outreach, or marketing costs because I didn’t know when I would need to plan for that. At this point, we were working out of my home, so I did not need to account for rent and utilities. I handled all labor, press, and marketing outreach and I was not getting paid.
Another reason I did not want to labor over the financial goals was because I was so anxious to get our company going. My partner and I were both very clear about the company motto and what our company would stand for and who our competition was, so it was easy for us to start immediately.
I did not want to write up a thirty page proposal with market analysis over various companies if the plan was only going to serve as an internal document. Years later, when we inked a partnership with a finance company in New York, we were subjected to audit after audit and had to write up various papers and statements regarding our company. If I had tried to submit our original business plan, even if done exactly as the business textbooks advise, I would still have had to re-write it entirely. Our financials and product were so different than originally anticipated, that the initial business plan would have been useless to me.
So, as I embark on a year of writing for Entrepreneurs Journey, I will recount the beginning steps of starting our wholesale business, and share with you what worked for me and what didn’t.
Writing a business plan was a good exercise for me, but it was an abridged document, and not the detailed document many people labor over. If you are approaching investors or feel you need to research out the market or your partners, then absolutely do the full business plan, financials and all. But if you have a very clear view of where your company is going, as I did, then do this goal-setting exercise and get going!