Writing your business plan requires research, and as many of you have probably had to do for other writings, you need to document and cite your sources. The business plan appendix is the place for that.

In your appendix you will include any citing and sources. Copies of them if possible. You will also include any relevant business documents. Like..

For a potential start-up business plan or idea plan:

• Market Studies and Reports
• Advertising Materials (direct mail, logos, anything brand related)
• Referenced Sources and Bibliography
• Resumes (Do you have a partner? Include theirs as well)
• Owners Finances
• Glossary of terms used

For an established or recently started business, you want to include everything from above plus:

• Legal Documents (Company Bylaws?)
• Annual Reports
• Board Meeting Minutes
• Business Credit (DUNs, Experian)
• Tax Documents
• Customer Testimonials (1 to 2 pages worth, quality over quantity)
• Distributors or Supplier listing
• Photographs, pictures, maps (storefront?)

There are a few items on the list that are up in the air. A glossary is not needed if you are using lots of technical terms. For common sense business ideas you can skim a lot from the appendix.

Overall I would say your appendix for a start-up should be at least 6-7 pages. Of course, like I said, this all really depends on the type of business and service vs. product.

I would say it is better to go over than be missing something. Maybe some people feel differently, but sometimes you only have one chance so make sure all bases are covered when that chance comes.

Other than financials, if there is one piece of a business plan that must be PERFECT… this is it. Your executive summary needs to sell the reader on your concept, idea, product, or service. It also needs to sell them on something just as important, you and your business model!

Write your executive summary last. That way by the time you are ready to write it, you have done all the necessary research about every other aspect and probably know your financials like the back of your hand. This is so key. Your executive summary is going to tell the reader if you are full of it or not.

Basically… If I have a hard time getting through your executive summary, I will never make it to the end. I’ve destined you for doom already. You will find about 95% of the people who will be reading your plan feel the same way.

Now, onto the particulars when writing the executive summary of your business plan:

Keep it short. It is a summary after-all. A lot of information you read out there will say no more than 4 pages. I say no more than 2. Unless you happen to be developing a new rocket shuttle, why all the fluff? Do not waste my time, you can do it in 2. And if you are a service business, it’s probably a small operation in which case it better only be 1 page or you are talking too much. The only way I would say to run over is if you use small graphics and tables for highlights that are placed into the executive summary. Which is GOOD, just don’t over do it.

Stay with the track. You should be talking about these points, in this order.

• Mission Statement and Goals
• When did or will the business start? Who are the founders? Briefly, what they do and why.
• Employees? How many? When?
• Location and any other facilities that will be utilized.
• Product or services offered.
• Relationships. Investors? Bankers?
• Company growth. Where are you taking this? How long til this happens?
• Financial and marketing milestones and highlights. Roll this in with the company growth if possible.
• The future for management.

Remember, keep all this simple. You have already laid out the specifics of ALL of these topics in the pages to follow. Don’t be redundant.

I see a lot of business people who think they can sell to everyone. You can’t and you don’t. One way to drive your business and business plan to the bottom of the barrel is to say you sell to everybody. Yes, there are products or services that everyone needs, but you can’t provide or market to everyone. So you need to pick a specific target market to focus your efforts on. Because plainly, you won’t be selling me the same shampoo you’re selling my mother.

Think about the target group that could benefit the most from your business and hit them hard. Get really specific. With my commercial photography company I target Architects and Architecture Firms. It’s a pretty small niche and is not as crowded as say Fashion or Advertising photography.

Once you have narrowed your market down as small as you can get it, see if there are enough in that market to satisfy your business. If there aren’t, move a little broader. Do this until you find a suitable market to point yourself to.

One good resource for looking at markets and educating yourself on that markets habits are demographics and census information. Try the Census Bureau Home Page for more info on the census database. This is a free service and you can get pretty specific in your searches, down to the zipcode and county.

If you do not want to put your own demographics together, there are services you can subscribe to like DemographicsNow. With DemographicsNow you can build your own reports and get very specific. I recommend them because the reports you generate are well put together and the data is not so raw as using the Census Bureau. However, DemographicsNow runs around 1300/year. You commit to a yearly subscription. So I would suggest if you plan on accessing it very casually that this is not a service for you. Work with what the Census Bureau offers. Once you play with it a bit it becomes a lot easier to turn into something presentable!

UPDATE: 

I completely forgot about FreeDemographics.com ran by DemographicsNow.com. I would also suggest signing up there and running all the free reports you can. It still comes out looking better than raw Census Bureau data. Here is a sample report.

There are a few pivotal questions that your business plan should be able to answer. Not being able to answer these questions reflects a lack of knowledge and is simply frightening for most you present it to. You have probably heard them before, but I’m going to tell you again. They are who, what, when, how, and why.

Who -  Who are you? Who is going to be working with you? Who will be under you? Who is your target market? Who are your competitors?

What - What are you selling or offering? Is it a service or a product? What does it do?

Why - Why is your product or service different? Why should a consumer or business use your company?

How - How are you going to differentiate? How is your service going to be offered? How is your product going to be made? How are you going to market it? How marketable is it?

When - When is your service available? When is your product ready for shelves? When are marketing initiatives going to take place? When will you break even?

It probably sounds elementary, but I promise these are basic questions that YOU and YOUR business plan better be prepared to answer.

SCORE - Counselors to America’s Small Business

I was introduced to SCORE about two years ago, when working at a small business resource lab (think tank, incubator, whatever you want to call it). What SCORE does is offer free services to smal businesses and entrepreneurs. It is a great resource and should be used when writing your business plan. SCORE is mostly retired executives, lawyers, and entrepreneurs that have been through the ropes and learned a thing or two.

If you want to read more about SCORE, just visit the website.

There are a few avenues you can go through to get assistance with your business plan or other business or legal matters.

First you can search for help. This is broken down by a basic keyword search, expertise search, or by state if you want local help. Expertise search will probably be your best bet if you have an industry specific question. Once you are at the expertise search screen, this is mostly self explanatory. However, there are a few industry listings that are not there. Photography for example is not listed under photography or commercial photography. That is something I would lump under Art and you’ll find that that is where most photographers or related fields are residing. Just select your expertise and hit submit to get a listing of counselors you can contact. By clicking on the persons name you wish to contact it will bring you to a form you can fill it to contact via email with them.

Another way to get help from SCORE counselors for your business plan is to lookup your local chapter. You can do so from the main SCORE website or by the Find SCORE page. My search sends me over to SCORE Baltimore.

Once there a “Counseling” link should be somewhere, you can click that and register to schedule a request for counseling.

Most SCORE chapters have workshops or seminars that can also be of help. Generally cheap to attend. SCORE baltimore is 40.00 for their workshop which is a full work day long and includes a “manual.” This could be an avenue you could explore, I know in my chapter if you view the workshop page they recommend you have a business plan ready before attending, that way you can get better use of the workshop through questions and review.

I suggest atleast exploring the SCORE website, there is a lot of information and avenues to contact them. A lot of people (myself included) think SCORE is a great thing and rave about it. I have received quite a bit of in-depth help from SCORE counselors, so I know how much of a value they can be.

First, I feel I need to put a disclamer. Because I am advertising one particular software in this post, which also happens to have a banner in the sidebar next to it. I want to say that this post is not meant to be biased, and that I genuinely feel it is a great tool. But like any tool, it must remain a tool. It will not do it for you. You still must do your research, know your industry, and have business sense to produce a good working business plan. Bottom line, no software in the world can help you if you do not know what you are writing about.

If there is one thing I advocate a lot, is that if you do decide to use software for your business plan that you do not think it is going to do the work for you! I admittedly use software for my business plans. However! I use them as a tool, not an easy button. The market is pretty much dominated by one company, Palo Alto Software. Their software, Business Plan Pro is very good if used correctly. Again, you can not expect it to do it for you.

When I wrote my first business plan I had Business Plan Pro at my disposal, but I said to myself… There is no way this software is worth its weight. So I didn’t touch it for awhile. I developed my business plan essentially all in OpenOffice Writer. Designed, organized, the whole nine. Then I took a step back and said let me take a few days away from it, I’ve been writing and working on this for a few weeks. When I went back to it and had pages of changes I realized I needed to make this became a huge hassle.

I finally decided I was going to give software a go. I loaded up Business Plan Pro and basically started copy and pasting from Writer. This was good. I could easily change things. It handled the table of contents and organization for me. A BIG plus! Because all of the anchors and links going on in my doc file were just confusing the hell out of me.

There are a few things I feel are cons about Business Plan Pro, but they are somewhat miniscule as you can get around them.

First, the tables look awful. There needs to be more control over design. I use tables when doing SWOT’s occasionally and I end up having to work around it. Which I will explain how to towards the end of this.

Second, again design related. There isn’t a lot you can do to the charts as far as color and layout. This goes for graphic charts that Business Plan Pro generates as well. They basically come in one flavor.

Here is how I worked around it: Business Plan Pro allows you the option to export into different types of files. Export your plan (once you are well done! or this will become annoying.) into a .doc file. Then open it in your favorite word processor, remove the charts, tables, whatever else you plan on changing. Remake them.

Not so marvel, but unless someone knows of a better way, you are stuck remaking. That did give me a lot of control though, and it really helps when you are working with something that is more than a plain layout. If you’re business plan is for, say a graphic design firm. Obviously you are heavy on visuals and everything needs to work together. Then again, you would probably already be remaking yours if you were a graphic designer, huh?

That’s not to say the charts don’t look decent, they do. But I suggest you follow a color or design scheme with your business plan, and unless the standard colors match.. you should look into changing them. But if you aren’t that computer savvy, it’s not the end of the world if they don’t match. They are charts.

Give me a few days and I will be posting a formal review of a few different business plan programs. For now, arrivederci!

Yesterday, I wrote a post titled “Sleeping with the enemy.” In the post I talked about your competitor being a great resource for information when writing your business plan. Here are a few ways to approach said competitor in getting that information. Some of these certainly depend on the competitor and industry, but for the most part I think these are good for the small business arena where the owner is an approachable and reachable person.  If you are trying to approach Bill Gates, then well… I have no help for you. Maybe try getting through the angry gorilla that is Steve Ballmer first. Anyway, onto the ways to approach your competitor for business plan help:

• Research them enough to know the owners other work, their hobbies, music tastes, whatever. You’ll find small business CEO bios to be loaded with misc junk that a customer does not really care about. Then write them a personable email to get your foot in the door, briefly touching on your similar interests. Once you have made contact and gotten on their good graces, try calling and offering lunch. Most will enjoy the free lunch and time away from the office.
• Find out if they sponsor any networking events or conferences, then attend and head to their table or booth. Introduce yourself and network in a little bit. If they are small business the owner is likely to be there. Then try the above referencing the conversation you had at the event instead of capitalizing on whatever is in their bio.
• Network with someone lower in the chain and climb your way to the top, or until you find someone in the competitors company that can give you enough information freely.
• If you are a student, things are really easy for you. Almost as if they don’t really take you seriously and feel they can indulge anything with you. Seriously, try it. Just email a competitor and tell them you are working on a business plan for a class and see what happens. But make sure you really are a student and are working on a business plan for a class, or that could really backfire on you.

There are a few things that I think should go unsaid, but I will touch on them anyway. First, be polite. Do not expect them to do anything for you. Second, make your intentions known before you get all the way to a conversation. Third, thank them and keep in touch. Maybe even send them a gift basket once you get off the ground announcing your new launch. They will be happy for you.

When writing a business plan, the most important aspect is to properly educate yourself on every aspect of the industry. Presumable, the business plan is about something you already know. That certainly is not always the case, so you should make sure to do proper education about the inner workings of the industry.

A few resources I highly suggest:

• Trade and Professional Associations
• Industry professionals or customers you will be serving
• Your future competitors

I put “Your future competitors” last for a reason. Most people are thinking.. “What?? I can’t ask them questions, they are the enemy!” This is not true. You can certainly ask them questions, and with the right ones and a good amount of tact, they will happily spill everything to you. People are generally proud of their accomplishments, much the same for entrepreneurs. They are happy to tell you how they did it. So I suggest not treating your competitors as enemys, but rather as great untapped resources.