Writing a simple business plan

Writing a simple business plan can get a business idea out of the head and on to paper where the business plan can be evaluated by business advisors.

A simple business plan is useful for individual entrepreneurs starting a business that does not require much capital investment. A comprehensive business plan that includes a break even analysis is necessary for investors who will gauge the likelihood of success. A simple plan, though, provides a necessary roadmap and lays out the bare bones essentials.

The elements of writing a simple business plan are included in the book How to Write a Business Plan by Mike McKeever. It’s published by Nolo Press and is available for purchase through Amazon.

How to Write a Business Plan provides an easy-to-follow-guide for setting out the steps that are vital to consider for the success of a new business. It’s an excellent resource.

The book asks the question early on “Do you really want to own a business?” to help the would-be entrepreneur evaluate their ability to function as a business owner. It’s worth owning as a timeless reference.

I’m using the book as a guide in writing a simple business plan for a potential adoption coaching consultancy that I may or may not want to launch. I’m an adoptive dad of four kids out of foster care, I have a granddaughter (I call her my g-kid), and we’ve had two teenage boys live with us as guardians in a multiracial family.

First, write the problem statement.

Businesses exist because they help a customer solve a problem, realize a dream, fulfill a want. A carpet cleaning service that does not charge rush fees on weekends helps customers who have last minute spills before parties. A business plan for a fitness center may help customers realize their dream of a healthier and more attractive physique while a travel agency may assist clients in taking unique vacations at affordable rates.

So write the problem your specific customer may have. Now think about how your business will help a customer (consumer or another business) solve a problem, realize a dream, or fulfill a want. This goes in to the second step which is writing the business description.

Second, write the business description.

Describe how your business will solve the customer’s problem. In my adoption coaching plan I’m drafting, parents may need help understanding causes behind their child’s behaviors that may be unique to adoption such as: loss of identity, alcohol use during pregnancy, trauma if placed in multiple foster homes, requesting an Individual Education Plan at school, or educating the extended family members why the adopted child may continually blame the adoptive mother.

The last portion of the sentence – educating relatives – can be a niche that is not fulfilled. The result may be the parents have strategies to use to improve the quality of life in their home. So my consultancy – drawing from professional resources, personal experience, and my wife’s knowledge as a mother and nurse practitioner – may prove useful to families who are the customers.

I also see another business need for managing the social media outreach for small businesses. That’s another simple business plan I want to write soon.

Write out how the business will carry out its mission in meeting the needs (or wants) of customers: one-on-one consultations, email consultations, product sales, all of the above?

Third, write the financial projections.

This can be highly detailed in a company that’s hiring a number of employees and needs to invest in equipment and facilities but for an individual entrepreneur it comes down to thinking through all the likely expenses and then projecting when the first sales will come in.

What are the necessary expenses for starting an adoption coaching consultancy? Not many. A website may be one. But how much will the site cost? How much might an improved site cost in 3 years?

I like to break the financials into categories like administration that includes bookkeeping, marketing (websites, business cards, memberships), sales, and customer service (gift baskets for loyal customers). There may be more expenses.

Then determine who long it will take to get the initial sales. Will the business meet an easily understood need? If so, sales may come in more quickly.

How long will it take for the sales each month to be larger than the expenses? This gives an idea of managing cash flow so debt is not used to pay the expenses.

Fourth, write your qualifications.

Why are you able to run this type of business? What special training might you need? How much will that training cost?

Finally, research and write the projected future for the business. What will the market be for the business in the next 3 to 5 years? How about after that? Try to be honest. Take time in gathering the data to answer this question thoroughly.

Every business has an industry association – I mean, every business! Use industry association research to determine the future and how an individual entrepreneur will carry out the business.

While this is a format for a simple business plan, and not a complex one, it will provide useful data to get started positively.

Use the simple business plan to sit down with trusted advisors such as friends, people from the PACE business center in Los Angeles, or with SCORE to get feedback.

Re-read it, re-write as necessary and use it as a foundation to start a business successfully and use it as a roadmap to guide the near future.

After a year of being in business, review it and see what changes may need to be made. Business plan writing is necessary, although it doesn’t have to be so complicated  that you need to put it off.