Writing a Business Plan for Aging in Place

I presented the first draft of the business plan for Aging in Place in Darien to the Strategic Planning Committee, and they loved it. Going through the planning process and then reading an actual draft of the resulting plan helped us all sort through our thoughts and goals, ask ourselves more questions, then really focus on how to make everything extremely clear for us and for a potential board of directors and funders.

I'm now editing.

The process of business planning has so much value. I wish more people understood this. One person on our committee is a member of SCORE (a volunteer group that helps entrepreneurs with their plans for free). Interestingly, he said, "I hope you charge a lot when you do plans for business owners. This has real value. It's an outstanding plan."  (I'm donating my time to Aging in Place as my own form of personal outreach to the community. I also sit on the Advisory Board.) But I was struck by the comment. I told him that many entrepreneurs think I charge too much for my service. He said they don't understand what I can do.

Basically, I get people to think and to explain all facets of their their business. I take that and write it all down in a way that tells a clear story of the true value of the company. The resulting document becomes a road map for achieving goals and a marketing document to attract investors -- or in this case --  funders.

 

The Value of Teamwork

Pundits, gurus, consultants and inspirational speakers all write and speak about the value of teamwork. "Are you a team player?" is one question I've gotten asked in countless job interviews. After awhile, it just seems like a trite idea that everyone loves to spout.

But in the past few weeks, the value of real teamwork has been driven home to me four times.

1. When I played paddle tennis over the weekend, my partner and I enjoyed the connection of real teamwork. We backed each other up, rather than poaching on each other. We used our different skills to cover the court to return our opponents balls no matter how they were hit to us. It enabled us to win our first set.

2. When our strategic planning group for Aging in Place in Darien met to hash out the core of our business plan, we had a full spectrum of perspectives as to the direction we ought to take. We did agree on mission, and with that as our guide, we each were able to list our goals, listen to each other and seriously consider what others had to say. I found the process really powerful because it forced us to think outside our own mindsets. In the end, we were able to form a consensus. And I daresay, our conclusions were much stronger than if just one of us had developed our goals in a vacuum.

3. When I prepared a dinner for a working women's group at our church, I did it with two good friends. By splitting up the food preparation, set up and clean up, we were able to serve a great meal and enjoy the fellowship of our gathering without a lot of stress and strain. Together we were more like Mary than Martha.

4. My husband and I faced the unpleasant and somewhat daunting task of cleaning up a mess left by a contractor. The contractor in question said he'd come back but hadn't yet shown up. So my husband and I researched cleanup methods on the internet, and then he started the job. When he got tired, he showed me what to do, and I took over. Before long, we had our problem licked. My husband said our tag-team approach had worked well. I agree.

If you're running or starting a business, playing a game, running a family or volunteering, think a bit about how you can help the others on your team -- and how they can help you. More than one brain and set of eyes and ears can add tremendous value to the end result.
 

Plans for 2010

At a family Christmas gathering my new nephew by marriage asked how my business was going. "Slow" was my response. People don't seem to have enough money or passion to pay someone else to write or edit their business plans, I explained.

Well, my nephew is a computer engineer and extremely bright. Before I knew it, he was telling me an idea for a new business. Amazingly, the business was in a growing industry in which I volunteer -- helping people aging in place. He didn't want to start this business himself; he just saw it as an opportunity. He had had no idea that I already had a passion in this area. Soon, he was asking me questions and giving me a whole new realm of ideas. He opened up new pathways of thought for me. He started talking about me writing my own plan for a new business.

My goals for 2010 suddenly took on new dimensions, and I became more impassioned. Now, I'm thinking of taking all my years as a member of the Advisory Board for Aging in Place in Darien and turning them into a business.

Later, I talked to another computer-engineering nephew, and he spoke about the importance of focus and passion. He has realized what he wants -- what stimulates him. That is how he can perform at a high level -- doing what he loves in the right environment.

So my advice to all you entrepreneurs out there is talk to people about your ideas. Listen to the questions they ask you. Think. And get passionate. Plan and take action.

It's a new decade. Reinvent yourself to work in your area of interest with people who make a great team.

Marketers Learn From Online Chat

When I was in business school, and later when I worked at General Foods (now Kraft), one of the fundamental tenets of marketing we were taught is to focus on the end benefit for the consumer. As I built my career in marketing and advertising, that concept was always at the heart of any marketing message. While you can talk about the technical reasons a product works well, and you can show such things in a brief demonstration, the focus of any ad was on the product's benefit for the consumer. Benefits sell.

So I really had to laugh when I read an article in the Wall Street Journal that claimed big companies like IBM were surprised to learn from online chat between their customers that all the customers really cared about was what the product or service actually did for the customers - the end benefit. Gee, the customers didn't care about all the technical gee-wiz stuff that IBM executives cared about.

I must say that I was truly amazed that a company like IBM didn't already know this elementary rule of marketing and that they had to learn it from online chat. Where have they been? (Probably just talking to themselves in corporate speak.) What has their advertising agency been saying to them? Was anyone listening? At least they're listening to consumers now. Yay for online chat!

When I work with entrepreneurs to develop a business or marketing plan, the one thing I emphasize is focusing on the end benefit for the target consumer. That is the message that must be developed and must come across. You'll see this in my Ten Questions Your Business Plan Must Answer on my website: www.upstartbusinessplanning.com.

If you want to read more about marketers learning from online chat, visit All Things Digital or the Wall Street Journal -- http://voices.allthingsd.com/20091123/marketers-find-web-chat-can-be-inspiring/?mod=ATD_rss

Start-up Tip - Do You Need a Mission Statement?

I just saw another business plan with a mission statement, and I thought, "How '90s!" Mission statements can be useful, but they really have become passe.

A good business plan should focus on answering the questions investors, creditors and strategic allies ask most often. And "What is your mission statement?" is not one of those. Better to spend your time writing about your value proposition, your management team, your relevant market, your business model (how you'll make money!) and your exit strategy.

A credo or mission statement can be a good way to express your goal for your business and how you'll conduct your business. It can go hand-in-hand with your vision for what your business will become. It can be like a rock that you return to in a storm. But it really doesn't have to be in your plan at the outset.

Start-up Tip: Set Your Time Line for Growth

You've heard the expression, "It's all in the timing." That can be applied to a lot of things, hitting a tennis ball, catching a wave when you're surfing, starting new plants in the spring, or starting a business and growing.

Most entrepreneurs are surprised at how long it can take to start a business. But think about it, there are many, many details that have to be worked out and executed after you have the big idea. That's why a detailed plan can help you get on -- and stay on -- the right track.

Begin with the end in mind. Where do you want to be in five years? Three? Two? One? Work backward from that and think about all the milestones you have to hit in order to arrive at your idea of success. Write up the milestones and outline a plan for meeting each one. If you're working with other people, make sure that you are all on the same wavelength and share the mutual goals and the methodology for meeting them. Figure out how long it will take to meet each one. Make a time line.

If you have investors or creditors, make sure that understand your milestones and time lines and buy into them. Most investors or creditors will be willing to put more money into your business (or expect payback) when you reach mutually agreed upon milestones.

While you're setting the milestones, set up metrics by which you'll measure your progress toward meeting them. This could be sales figures or other hard data about your consumers or customers and their response to your service or product.

Keep your eyes on the goal, and go for it!

Start-Up Tip: Execute Your Plan

One of the start-up companies I've done plans for just died after three years of existence. I am really sad. When I was talking to the former CEO who had hired me to write their plan, he lamented that they had deviated from their plan just before execution. That was the beginning of their end.

One board member got cold feet because of a comment from a social media expert. He suddenly lost sight of his passion and his vision. What a pity. The vision had been great. They had raised several million dollars to execute it. Then, two weeks before the national roll out, they deviated from the plan and the vision. It was chaos from then on. I helped rewrite their plans, but they kept not executing. They kept changing things or not executing as well as they could have.

Eventually, professional managers took over from the founding entrepreneurs. That was the true death knell.

You've seen it on a national scale. Jobs had to return to Apple to get the company back on track. But Bezos never left Amazon or Gates, Microsoft, while he was building the business. The visionary has to see the dream through to fruition. He or she has to keep that focus and execute the plan.

So get a great plan that has focus, vision and passion. Then, execute it. Don't lose heart. Don't listen to the naysayers.

Start-Up Tip - How Will You Make Money?

In an era when companies like Twitter can raise millions in capital and have no revenues flowing in, you may wonder why your business needs revenue or profits to exist or to raise capital. Twitter is simply in a league by itself. Investors invested in young, smart people with track records. That can happen -- but not very often.

The average Joe or Jill has to be able to demonstrate to investors that their business idea can make money. That means you need to plot out how you're going to do it. I've had all sorts of ideas of how I'd make money, if I were running Twitter, but they are not about to hire me. I'm not young and hip.

Making money is not that mysterious. You make a product or create a service, and you sell it to customers. Of course, Twitter doesn't sell its service. Google doesn't either. But Google does sell pay-for-performance advertising.

So, ask yourself -- What am I selling? What can I charge? With pay-per-click or pay-for-performance advertising, the market determines what you can charge. Demand drives the price and the volume because advertisers bid on the keywords they are buying. This works the same on Bing, Yahoo! and other pay-for-performance search engines and ads.

But what if you sell knives? You have a great design. Where will you sell it? What will you charge? How will you get it to consumers? What will it cost to manufacture? All these calculations go into figuring out how you're going to make money. Even if you don't like to do math, learning to do this kind of math is essential (and fun) because it empowers you to understand your business. Entrepreneurs who understand their businesses can more easily raise money and can have an easier time making money.

Take a look at other products on the market and see what price points they sell at. Find out what the sales volume is. Think about your wholesale price to your customers and how that will compare to the retailers' final price to consumers. Figure out the mark-ups and the profit margins. What is normal in your industry?

And while you're at it, remember the importance of having a brand. It doesn't cost a lot to make Nike sneakers, but Nike charges a lot for them because of their brand name. Can you create a valuable brand like Nike or Google? Even Twitter has become a valuable brand because of all the people using it. It's helping to fuel the revolution in Iran. How powerful is that?

Start-up Tip - What Will It Cost to Start Your Business?

When a group of entrepreneurs called me a few months ago about editing their business plan, I asked them how much money they wanted to raise. They said $150 million! I truly could not believe my ears. How could a new venture possibly cost that much?

Well, they were planning on purchasing all sorts of heavy equipment to create a renewable energy business and setting up shop in several states. Another potential client needed $1.5 million to pay lobbyists to help effect legislative changes that would make their business more viable and create demand.

Even in a booming economy, these are not reasonable start-up expenses, in my humble opinion.

But in a recession, you really need to consider bootstrapping. Start as small as you can and expand organically, plowing profits back into the business. Capital has dried up. Banks still are not lending; lines of credit are shrinking; friends and family don't have disposable cash to lend or invest; VCs and angels are pickier than ever.

So you need to ask yourself, what is the minimum I need to get started? Write down the expected expenditures on paper or in a financial computer program like Excel. Make yourself a spread sheet. Think of the cash that will need to come in to cover monthly expenses and capital expenditures. Ask yourself if you can go without a salary? Without benefits?

Here are items you need to think of:
Cost of you producing your product:
Raw materials
labor
machinery
warehousing, picking and shipping

Overhead:
office or factory or warehouse space
some office equipment
supplies
communications
IT
legal
accounting
insurance
travel
entertainment
marketing - advertising, pr, promotion, website, branding, graphic design, trade shows, etc.
patents

Depreciation
Interest
Taxes

Capital expenditures and leases
cars
equipment
land
software

The list goes on -- What can you do without? What is essential? Do you need to create samples? Brochures?

Figure it out and write it down.

If you need help, go to the Small Business Administration (www.sba.gov). I also consult or can provide my written guidelines to financial planning. email me at upstartwyn@gmail.com -- I know how to demystify financial projections and using Excel.

www.upstartbusinessplanning.com.

Marketing Basics

Last week I attended OMMA Global in New York City. I thought I'd learn all that I never knew about digital media and all the new platforms. Instead, I found out that I knew just as much as the people giving the talks. They all went back to basics.

You can't execute or buy the new media without understanding your target audience and the benefits you deliver to them. How basic can you get?

The creative should be appropriate to the media you're using -- another basic.

Sure, there were all sorts of cool companies with vertical marketing opportunities, widgets, and digital delivery mechanisms. But they're all worthless, if you don't have the marketing basics down.

To learn more about the questions you should ask when planning -- see my website -- www.upstartbusinessplanning.com.

10 Tips for Starting a Business -- Tip # 4 -- What Will It Take?

What is it going to take to start your business?

How will you make and sell your product or service?

How will you get the word out?

Now is the time to start really researching and planning. Do you need an office? A factory? What can you do yourself? What do you need to outsource?

To find out, go out and study similar businesses. Talk to business owners, read articles in the trade press, join trade associations, go to events.

Make a list of questions, then go out and get them answered.

What will it take in time, space and money? Write down the answers. Create a plan for achieving your goals.

Organic Growth -- Planning

Organic growth can't happen without a plan. Even though most entrepreneurs find that they can't follow their plan exactly, a good plan will help them achieve their main goal.

In the dead of winter, when the ground is frozen and the sky is bleak, is when I make my plans for my summer garden. I sit down with an empty sheet of paper, pencil and my seed catalogs to plan the future. I can imagine warm sun, colorful flowers and the joy of picking my own organically grown vegetables. But first, I remember where I have planted last year's crops. This is important because rotating the crops cuts down on pests and diseases and keeps the soil from depleting essential nutrients. I also think about what worked last year and what I would like to do differently. What would I like to try that's new? What successes do I want to repeat?

It's important in business planning to take the same approach. To map out what you want to achieve and where you want to go, you need to understand where you've come from. You need to think through past mistakes and successes, in order to make a better future.

Please post how you approach planning your business (or your garden).

Wyn

Do Start-Ups Need Plans?

On Tuesday, Jan. 9, 2007, the Wall Street Journal's "Enterprise" column asked, "Do Start-Ups Really Need Formal Business Plans?"

Some academics say - no - unless you are seeking venture or angel capital. Big plans of 50 pages aren't worth the time. It's better to execute. That said, a good summary and PowerPoint, plus detailed financial projections are all start-ups really need to raise money.

I would agree. I haven't written a full 30-page plan in years. But I do write excutive summaries for clients, and they have raised capital with the summaries and financial projections.

Just doing the summary makes you, the business owner, think through the elevator pitch and the business model. It makes you go out and get relevant data about the market. And doing financial projections lets you know how much money you need to raise in order to achieve success. It also tells you how fast you'll burn cash and when you'll break even. These are crucial pieces of information.

The planning process also helps some entrepreneurs realize that they really don't need outside funding. Or if they do, they could take on some debt, rather than giving away equity and ownership to investors. Several entrepreneurs I've worked with have discovered that organic growth -- plowing profits back into the business -- is the best way to grow.

Bottom line for me -- do plan -- do an excutive summary and financial projections. And get together an excellenet management team.

You can read the WSJ article at: http://www.startupjournal.com/