Lately I've been hearing aspiring entrepreneurs say, "Jack, I've got a great business idea! I know I'll win!"
I'm glad to hear this year's Miami Herald Business Plan Challenge really has charged your batteries. By now, you've found the Internet flooded with tempting, easy-to-copy business plan solutions: from software packages and checklists to "cookie cutter" plans.
"Yes, " you say. "But all these solutions call for too many pages! Contest rules say we can only submit two pages!"
So I've gotcha! But don't despair; you're not alone in finding the business plan format overwhelming.
In order to give life to your idea, you must learn how to manage these five areas: money, people, operations, sales and marketing.
To help solve these mysteries, I published The Core Value Proposition, which offers a new starting point for business development. It serves as an anchor for your business plan, outlining a clear four-step business-building process. It's available at Amazon.com and Trafford .com.
Here's how it works.
First discover, define and select one business-building idea. Next, give your idea substance by clearly defining what I call the five basic Value Drivers:
IDEA: What do you do for the customer?
BENEFIT: What's in it for the customer, compared to what your principal competitors are offering?
TARGET: How are customers identified and reached?
PERCEPTION: How do you want to be perceived by customers, employees and suppliers?
REWARD: What's in it for you, for your partners, stockholders and employees?
Summarize these five Value Drivers to form a succinct 50 to 60 word statement about your company's mission, which I call the Core Value Proposition of your business.
Next, use a product prototype or description to determine if your Core Value Proposition is viable. Talk with people in your target market. Listen carefully to their responses.
Then do the numbers; a cash-flow projection will help you decide if your idea is financially workable.
During the development process, you may reach one of these two conclusions:
You uncover proof that your idea is not as good as anticipated. So stop! Rethink your idea. The Core Value Proposition saved you time, money and anguish.
Or you may discover your idea is much better than imagined. You adjust your Value Driver focus, modify your approach, and rewrite the Core Value Proposition.
Now you're ready to custom-build a prize-winning business plan. Write a plan that fits snugly into two pages. You may include one additional page of supporting material, such as a product picture or diagram, a spreadsheet or marketing materials.
Next you might ask, "Jack, how do I custom-build my business plan?" Remember, a powerful business plan is always tailored to the audience you are communicating to, be it the bank you want to get a loan from or the judges of the Business Plan Challenge. Your plan is a selling tool!
Just answer these four questions:
* Do you know enough about each judge? Set the plan's tone to meet their expectations.
* What do the judges expect? Consider each judge as a potential customer. Make sure their interests and benefits stand out clearly.
* How important is cash flow? Your cash-flow statement clearly shows if you've done your homework! Some say it's second only to the Core Value Proposition.
The judges want to see: A simple monthly cash-flow projection for the first year, and then a quarterly projection for the next two years. Focus on working capital requirements and sources, including start-up costs. State how cash flow supports operating expenses, especially during the first three months when there might not be any income.
* What do you expect? You want each judge to agree your plan is the winner. So sell your business plan to the judges with the same gusto that you would sell your product or service to consumers. I tell entrepreneurs to always remember AFTO -- Ask For The Order! In this case, your asking the judges for their vote!
So, if you didn't save your Business Monday issue from Feb. 19 where this year's judges were featured, go to www.MiamiHerald.com/ Business and click Small Business to learn who they are. Once you know your audience, designing your business plan will be that much easier.
Good luck!
