Why You Need a Business Plan

As a small business owner you will have finite resources and in the current financial crunch you will rely on your time, savings, any available equity and potential support from a local bank. Therefore it is critical that you use each of your resources wisely and effectively.

A business plan documents your passion and directs toward a vision of where you want your company to be within a stated period i.e. 10 years. It should also indicate your mission e.g. to be the best provider of janitorial services in the federal government. Specifically your plan should include your specific marketing goals for reaching your federal clients and which clients you want to pursue and why.

This is where you should be reasonable and practical. When I launched my business I had relationships established in Tennessee with the Department of Energy and I lived at the time three hours away in Georgia so that was my first initial focus. I had other relationships but operating on a small budget the proximity was critical and prudent for me to network, gather information and respond to opportunities as they arose and they did.

Your business plan is also a translation of your vision into a tangible plan that you can execute. It should require you to determine what financial resources you can invest and what it will take to pursue your goals. Thus, you should have a budget that supports the vision and again be realistic. The sales cycle in the government from opportunity identification to contract award can range from as short as a few months to a couple of years with 18 months being the average for contracts in excess of $1 million contract value.

Smaller contracts for commodities such as paper supplies could be faster but it still takes time to get on the list or on a General Services Administration (GSA) schedule [more discussions to follow on GSA]. Therefore you should be realistic your income statement may only reflect expenses for the first year unless you are fortunate before you launch your business that you have an opportunity that you through your former contacts were able to consummate immediately.

This is rare so plan on using your resources to finance the business until your first contract. The business plan model and format has many forms and you can go to www.sba.gov and find several examples. I do not recommend using the software that serve as a “foolproof” method for doing a business plan. This is your business where you will be investing your blood, sweat and tears and risking your well being and those you support—it merits your time to develop it from the beginning to end. Yes do research, get advice but at the end of the day it is your business—get involved.

As a sidebar, please know that becoming successful is not an overnight experience. You can read several great books that mention it takes 10 to 15 attempts to land a successful enterprise. If you have plan the margin of success increases but the ingredients of diligence, commitment, passion and determination will make the difference.

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