A well-written business plan is key to success in entrepreneurial world

Joyce Wagner
In Motion Staff Writer

Avoiding pitfalls in business is crucial to success. Making a business plan, a road map of sorts, will keep the process moving in the right direction. Two sources available to get the process started or help at any point along the way are, SCORE and the Small Business Development Center. Both offer counseling and workshops to address the many issues that arise with small businesses.

At a recent seminar, Plan for Success, Jack Phifer, a counselor with SCORE said, “People don’t plan to fail, people fail to plan.” He also pointed out that a business plan is like a trip planner, GPS and gas gauge all rolled into one. It provides an objective, critical and unemotional look at business before and after inception. A good business plan helps to identify areas of strengths and weakness, pinpointing needs and goals.

One of the biggest problems incurred in business planning is people overestimate sales and underestimate their costs. Which brings up the question posed by Phifer, “Do you have a real grasp on what is involved in the business you are considering?” Any business should be something you have a real interest in, something you can sustain your energy in over the long period of time necessary to develop it.

He also suggested practicing your ‘elevator pitch.’ The elevator pitch should answer the question “What’s your business?” with a brief, informative answer, taking no longer than an average elevator ride. This should be well thought out and practiced. An example of a success story is the inventor of Spanx, Sara Blakely, who said, “I’ve invented footless pantyhose so you can wear white pants, look thinner and wear any style shoe. Women have got clothes that have been hanging in their closet for years because they can’t figure out what to wear under them. This is the answer.”

Art Zimmet, from the SBDC continued the presentation, giving the elements of a good business plan. Contact information should be on the cover sheet. The executive summary should be only one page with four paragraphs that include the problem you want to solve, how you will solve it, your business model and the underlying magic of why it will be a success. While this part should be towards the beginning of your business proposal, it is usually written last, and conveys the main points. You may want to include a business description, market analysis and marketing plan, research and development, critical risks, financial, milestones and appendices. A more thorough plan will give a greater edge in starting your business.

Zimmet also touched on the topic of overestimating how much your business will likely earn. Using the top-down method, the number of consumers possible is multiplied by the percent you think will buy your product or service, then multiplied again by the cost to the consumer. The resulting figures look great on paper, but isn’t very realistic. The bottom-up method takes the number of consumers you will likely reach, then takes into account the percentage that will actually buy the product, then multiplies that number by the work days available, then by the cost to the consumer. The reality is much lower, but likely to be achieved.

Common mistakes regarding business planning as pointed out by Zimmet, include; “It’s all in my head, I don’t have time to write it down.”, “I can whip up a business plan in a day or two.” and “My business will stand out from the crowd, I just know it.” These pitfalls can stop your plans dead in its tracks.

Suntrust Bank representatives, Andrew Barboza and Ann Luke gave the banker’s point of view. While banks do not provide legal advise or accounting services, they can advise, counsel and suggest products, and are there to help with financial business from payroll to retirement. The criteria for borrowing is different for personal and business. Before seeking financial backing, you should prepare your business plan and be prepared to answer the question asked by Luke, “How do I get paid back?” Any lender will want to know how they’ll get their money back.

Creating your business plan is crucial. SCORE and SBDC are available at many convenient locations to help get you started.

SCORE 87 is the Volusia/ Flagler chapter of the nationally recognized group that celebrates 50 years of service in 2014. Nationally, they have helped more than 10 million small businesses since starting in 1964. They have an office in Daytona Beach. Their website is SCORE87.org. The national website is SCORE.org.

Florida’s SBDC has offices throughout the state, with one located on DSC’s main campus, in Bldg. 110, Rm. 236. Their website is sbdcdaytona.com.