IN THIS CHAPTER

Looking over the planning you’ve done

Making the necessary changes to your business plan

The planning process is done. Your plan is ready. Or is it? Before you unveil the final draft of your business plan, ask yourself and your trusted advisors the simple but important questions in this chapter.

Are Your Goals and Mission in Sync?

The goals you set for yourself are the results that you absolutely, positively intend to achieve. To a large extent, your goals determine how you set priorities and how you run your company. (They also play a big role in your success.) Your goals have to be consistent with one another so that you don’t run in different directions at the same time. In addition, your goals should be tied to your company’s mission so that you always head in the right direction. For more info on your mission and goal setting, flip to Chapter 4.

Can You Point to Major Opportunities?

Opportunity only knocks once, the saying goes. So you need to hear the knock when it comes. Your business plan should highlight the major opportunities that you see heading your way (in technology, markets, or distribution, for example) and outline the actions that your company intends to take now to be in a position to take advantage of those opportunities down the road.

Have a trusted associate or acquaintance read your forecast to see whether the same opportunity seems to jump out. Chapter 5 talks about ways to spot business opportunities.

Have You Prepared for Threats?

You may be tempted to put on rose-colored glasses and see a bright and sunny future ahead. Now’s the time to take those glasses off and get real. Your plan stands a better chance of success if you paint an objective picture — including the bad news along with the good. That way, you’re prepared for the imminent dangers that come with starting a business. Make sure that your business plan acknowledges the biggest threats that loom on the horizon (a market slowdown, new regulations, or increasing competition, for example) and offers concrete ways to prepare for them. Chapter 5 points out how you can identify and prepare for threats. If you recognize threats before your competition does, you can often turn a threat into a real business opportunity.

Do You Know Your Customers?

Customers are the lifeblood of any business. The more you know about your customers — who they are, how they act, and what they want — the more you know about your company. Customers tell you how to succeed in the marketplace. Your customers are so important to your company that you can’t afford to leave them out of your business plan. You should answer three questions:

• Who is buying?
• What do they buy?
• Why do they buy?

Your plan should explain how your company intends to serve customers better than any of your competitors. Check out Chapter 7 to get better acquainted with your customers.

Can You Track Your Competitors?

Your competitors are around to make life interesting. They always try to woo your customers away, promising products or services that have better value (more benefits, lower prices), and you can’t ignore them. You have to be able to identify your competitors — how they do business and where they plan to go in the future. Competition represents a big piece of your business environment. Your business plan should cover what you know about your competitors and — more importantly — how you intend to keep track of them on an ongoing basis. Chapter 8 talks about the methods you can use to keep an eye on the competition.

Do You Know Your Strengths and Weaknesses?

Business plans typically concentrate on a company’s strengths. Yes, they’re worth boasting about, but you also need to consider your weaknesses. You may find it hard to be objective in making an honest assessment of what your company does well and what it can do better. But your company’s strengths and weaknesses determine your odds of success as you look ahead. Strengths and weaknesses refer to your company’s capabilities and resources — how well they match up with the capabilities and resources that you need to have in place to be successful.

In your plan, list your company’s capabilities and resources — from management skills or research expertise to operations and distribution strength or a loyal customer base. But be sure to describe how each of these capabilities or resources is either a strength or a potential weakness, given your business situation and the industry in which you compete. Turn to outside people if you need objective feedback. Chapter 9 helps you discover your company’s strengths and weaknesses.

Does Your Strategy Make Sense?

Sure, you should know where you want to go, but you also need to know how to get there. Strategy is what makes your business plan happen. Make sure that your business strategy pulls together your company’s strengths and weaknesses, the opportunities and threats that your company faces, and your business goals.

It should be clear, from beginning to end, that you base your business plan on an overall strategy that makes sense. Your company should have a strategy that you ground in reality and that makes reasonable assessments and assumptions about what’s happening and what’s about to happen — a strategy that logically and rationally looks at what you can accomplish and how long it may take. Flip to Chapter 14 for more information on strategy.

Can You Stand Behind the Numbers?

Too many high-flying companies have come crashing down in recent years, victims of unrealistic and sometimes even phony numbers on the balance sheet. Make sure the numbers you outline are rock solid. Think of all your financial statements as your company’s report card — one that answers some big questions. Do your customers love you? Are your competitors afraid of you? Are you making the right business choices? An income statement presents the bottom line, the balance sheet shows what your company is worth, and the cash-flow statement keeps track of the money.

Your current financial statements tell everybody how well you’re doing. But many people are more interested in your financial forecasts, which say what you expect the numbers to be in the future (these are your pro forma statements). Just because your forecasts include official-looking numbers, however, doesn’t mean that the predictions will necessarily come true. If you want to paint an honest picture of your company, your business plan should include a realistic financial portrait, based on assumptions that you believe in and numbers that you trust. Chapters 11 and 12 paint a financial picture for you.

Are You Really Ready for Change?

Everything around you — from technology to competition and your market — is going to be a little different tomorrow, no matter what business you’re in. To keep up, you have to think two or three steps ahead. You must look carefully and continually at what may happen in the world and how it may affect your company. Although your business plan paints an honest picture of how you see your company, the plan should also acknowledge the fact that you don’t have a crystal ball. So present some options. Include one or two alternative business scenarios, asking — and answering — the question, “What if …?” See Chapter 13 for more on scenario planning.

Is Your Plan Concise and Up-to-Date?

Ultimately, a business plan is a tool for communication. Make sure yours gets the important messages across. Your plan should certainly capture all the essentials about your company and its situation, but remember that none of the information can be of use to anyone if your business plan is too long, impossible to read, or outdated. So take time to read over your plan. Is it easy to understand? Is it easy to navigate? Do you know where to find all the details?

Have an advisor read your plan and ask the same questions. Objective feedback can provide you with invaluable perspective.

What’s the Worst That Can Happen, and How Will You Deal with It?

We’ve given you lots to think about in the warnings earlier in this chapter. But there’s one more that should be on your list, and maybe at the very top: What is the one worst thing you can imagine that might happen to your business — and what’s your plan to deal with it? This might be intensely personal to you, especially if you’re still a relatively new and small firm: What if you are no longer in the picture tomorrow? What happens? Can anyone else step into your shoes and carry on? Other similar questions: What if your key customer drops you tomorrow? What if you get hit by a lawsuit by a customer, supplier, or anyone else tomorrow? What if a key supplier says it won’t provide you any more goods? So ask yourself: What’s the worst-case situation, and what’s my Plan B?