SCORE Minnesota

How to Start a Business Plan

January 28, 2010

So you’re ready to start that business plan you’ve been procrastinating over for the past year. Reality has set in: no business plan no bank loan, no business plan no investment, no business plan no business. But where to start: marketing strategy, sales programs, financial plan, customer research…the choices seem endless. I want to make a suggestion…start at the beginning.

Answer two fundamental, bed rock questions: What do I want my company to look like in the future? What will my company do for my customers? The answers to these questions will define the vision and mission of your company. It sounds simple (and it is), but it’s not easy. Developing your vision and mission statements will take creativity, soul searching, and self knowledge, but most of all it will take a lot of work. So let’s get started!

Your Vision Statement should paint a picture of what your business will look like at a specific point in the future. We all have different time horizons so pick a point in the future that’s comfortable for you: one, three, five years. Include what you want to look like internally: sales, profits, employees, culture, physical environment, etc. Also include what kind of a relationship you have with your community, your industry, your nation, etc. The Vision Statement can be modified as the facts and environment change. Here’s an example of a vision statement from a consulting firm I’ve worked with:

“Within five years ABC Consulting will be nationally recognized as the best profit improvement consulting firm in the country. We will develop a unique profit improvement process that will provide small and mid-sized companies with specific, actionable profit improvement programs within 30 days of beginning the engagement. We will have revenue of $5 million, and a pretax profit of 20% by December 31, 2014. Our consultants will not be freshly minted MBAs, but experienced business people. We will provide our consultants with a place to “show their stuff.” Our company will be an active participant in the community’s homeless programs, contributing 10% of pretax profits to reduce homelessness.”

Your Mission Statement on the other hand does not look inward at all. It focuses exclusively on what the firm will do for its clients. It should be able to withstand the test of time. That is not to say it can never be changed. As you proceed developing the business plan you should return to the Mission Statement to clarify and improve it. Here’s an example of a Mission Statement from the consulting firm mentioned above:

“ABC Consulting is dedicated to significantly increasing the profitability of our clients in a manner consistent with their values and goals.”

With the Vision and Mission Statements completed we know who our customers are, what we’re doing for them, what kind of employees we need, etc. We can now proceed to complete a business plan that’s consistent with what we want for our company, and our clients.

For expert help and advice on business planning, contact SCORE by clicking the link on the right to the office nearest you or click here to request free face to face counseling and or mentoring.

Have you ever considered volunteering for SCORE? SCORE volunteers help millions of new or existing small businesses succeed each year by sharing their knowledge and experience. Click here or the link on the right to the office nearest you to learn more.

Jim O'Brien, St. Paul SCORE
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Filed under: Business Planning

Tags: bank loans, business plan, first step, mission statement, vision statement