A Michigan Jobs & Career Portal service.

Everyone is different! Some want a business/lifestyle -- they want to make their hobby or trade profitable.  Some business owners want to reinvest every nickel in their business and  live frugally while they plow most money earned into new equipment, and grow the business over a number of years.  Some want the business to be profitable right away.  Mothers, now known as Mompreneurs , may want to start a small business while taking care of growing children, and as a result, need to factor in time and flexibility. A retiree may want to focus on a lifetime dream venture.  A business or strategic plan forces you to think about  your personal goals. Some want to manage every aspect of the business and should have a small business to retain control.  Others are comfortable with administration and would rather delegate the work than get highly involved in the details. Do you want to be the sole leader or can you share leadership? It is important to be scrupulously honest with yourself so that you don't plan a business that is not right for you.  It helps to put it on paper, to organize, to focus on your goals and to really think about what you are about to do. Will the business you start meet your career plans?  And use your own capabilities? Click for Virtual Advisor!

Besides designing the site, you also must  "publish" the site to a  "server" (computer dedicated to keeping yours and other sites on the Internet) also called a "host" server. This is why many small business purchase a "web hosting" service or Internet Service provider to continually provide them with sales data, e-commerce software, and tape back ups.  Your Webmaster or Internet Service Provider (ISP) can also make your site pop up first rather than last on several search engines such as  Yahoo! ,  Google , Cuil,  MSN ,  A9.com , and  Ask.com .  In addition you can purchase more server capacity as your business grows from the web hosting service or ISP. That is why web-hosting services have an advantage over do-it-yourself sites; they can provide a scaleable system so that large variations in traffic can be handled. 

Registering a Domain Name

You will need to register a domain name or URL (universal resource locator), a unique name for the site, using providers such as  doteasy ,  Verisign , GoDaddy.com or  register.com .  Try to select something catchy, memorable and short. You will also need an e-mail service such as Hotmail , Yahoo! , G-mail or Outlook Express .

Do I need an Intranet?

Consider whether you need an Intranet or internal web pages accessible only to company employees or suppliers. Intranets can help you systematize company operations and do save money.   If you have a lot of information on your Intranet that would be costly to replace if lost, you may need an Intranet plus a security system or "firewall" to protect private company information. You will not want everyone to see sensitive data on your payroll, prices, names of customers, and suppliers. These pages should have a password for entry.  Secure software is also an option.  You may want to consider wireless transmission that is cheaper for more web transmission than a T-1 line.  Note that security for wireless is usually not as secure as for a wired system.

E-Commerce Software Packages

E-Commerce Software can help your business be much more efficient. The software packages will have modules for inventory, purchasing, marketing, and on-line ordering, etc. Some popular ones are Oracle and SAP (Systems, Applications & Product in Data Processing).  This is a large investment for a small firm. These packages are typically for large corporations who have in-house IT staff to manage the system.   

The management section of your business plan should consider a less top-down form of management as your firm goes toward an on-line organization. Organization based on teams or line form organization with less hierarchy seem to work better for many technology firms. You may also consider how telecommuting could lower overhead. 

The business plan for an on-line business must have a niche market just like any other business plan.  Factors such as a good management team, well thought out financial projections, and an excellent pricing/marketing strategy will interest investors and have customers coming to the site.

MARKETING

Sales are really what its all about. Your business will ride on your marketing strategy. You must know who your customer is, where that customer is located and how to best distribute the product to that customer. You also must know your competitors in the real world and why your product could stand out above all the rest.  You need to consider all the various ways one can market this particular product such as special promotions, advertising, direct marketing, on-line sales or a combination of all of these may be your recipe for success. Try to find an industry that has less competition or try to find a market niche that no one else has created.

Market Analysis

It's important to analyze the industry and to provide the reader with a lot of solid facts about the industry.  You could describe the market in terms of dollars.  List major trends that might influence your business such as mergers of major manufacturers in the industry, new products, development of new service concepts, technical developments, etc.   Remember that the bank or investor has probably seen many business plans, with glowing descriptions of future sales.  They are more likely to be impressed with solid research about the industry.

Be sure you understand just what it is you are selling -- your market niche. How does a customer benefit from your particular mousetrap?  Are you selling time-saving products for busy women?  Are you selling the idea of a bargain?  Are you selling the get-away aspect of a product like a vacation, spa or entertainment videos. What is your market -- be as specific as possible.   Market research can be as close as a web site or the  Yellow pages .  Visiting a competitor to find out what they offer and what they specialize in could help you define a niche business for yourself.   Professional and trade associations  and their journals will offer lots of business growth figures, sales figures. You want a growing market rather than a shrinking one.  Some of this is demographic, as the baby boomers age; there will be more call for medical supplies, health foods, exercise equipment, home care, etc. Many business services are making money doing all the things that women used to do before they went back to work.

Competition

Analyzing the marketing approach of the competition can be informative -- how much is spent on TV or web site ads, radio, direct mail -- what is their emphasis and why.   You can speak to mutual suppliers in general terms, asking general questions. If you are already in business, your own employees that service the public directly will have information on the competition.   Do a customer survey or just ask customers for their preferences.  Research each major competitor through business directories,  professional associations ,  newspapers  and trade journals .  Giving solid facts when evaluating the competition will show that you did your research and will impress lenders.  Working for a similar business is an excellent idea.  Many businesses have grown from the ideas of an employee who thinks he or she can do it better.

Marketing Strategy and the 4 P's Product, Price, Place and Promotion

• PRODUCT: In today's economy you are more likely to provide a service than a product.  Will your service or product really benefit customers by making their life more convenient, more comfortable or give them information? 
   

• PRICE: Pricing is a strategy, also -- Are you trying to maximize profits, remain competitive? Introduce a new product?  Price can vary -- typically a huge discount for large orders, price cuts to those who will arrange to pick up and transport the product if it is large, financing (payment) plans, etc. Most small business owners make an error in trying to lower prices to gain market share.  Often there are other reasons than price to influence a customer. Have you ever bought something with a higher price just because the store was convenient, classier, or had convenient parking? Have you ever spent more on a meal because of the restaurant atmosphere?  Everything enters into this.  Some customers tend to shop where the help is friendlier, and where the products have better quality, or where there is a good return policy.  Sometimes its better to be first than best -- the first T-shirt commemorating an event will be sold quickly. 
   

• PLACE is important -- There are more and better supplied hardware stores where the population has a lot of trades people.  They are servicing a good customer base.  The area where you can conveniently bring together supplier and customer may be key.  Realtors, bankers and the local chamber of commerce may have helpful information on the best locations.  Manufacturers and wholesalers value inexpensive warehouse space and access to the freeway systems.  Retailers want to be close to the customers as well as the main roads.
   

• PROMOTION: Advertising includes the anything that touches the customer -- signs, trademarks, business cards, web sites, telemarketing,  professional advertising campaigns, advertisements in the community  newspaper , brochures, flyers, free samples, and coupons.  You will want to have an advertising strategy -- advertising is expensive. You may want to hire a professional ad agency initially because you want your advertising dollar to be very focused.

RESEARCH  

The  trade association  for your specific product will have a lot of information on that specific industry. Trade magazines frequently have sales analysis and other research reports. The  Michigan Small Business & Technology Development Center  in your area or  Chamber of Commerce  should also have business start up kits designed for entrepreneurs.  The  Small Business Administration  site is a good place to start.

There are also resources available at your  library  -- such as the  Thomas Register  (which lists products and companies in almost every area of endeavor in the United States) or databases by firms such as  Gale Research  and  Dun and Bradstreet  that can help you in your research.  Companies are categorized by SIC (Standard Industrial Classification) and recently by the new code  NAICS (North American Industrial Classification System) . The  NAICS  adds industries such as fiber optics, software development and other computer industries that the SIC did not cover.

The  U.S. Census Bureau  can help you find the number of people in your county broken down by sex, age and nationality.  You can find census survey information from the NAICS (North American Industrial Census Survey) for your company in the county where you wish to have your business.  It will have sales data. You will also be able to review surveys showing average income, age and other factors in various geographical areas such as state or county. Focus on your industry, your competition and your customers.  If you are catering to a wealthy upscale population with lots of disposable income, it is important to find out which counties have high average incomes and then market your product to those geographic areas.   Some helpful  research web sites include: The Security and Exchange Commission (SEC's) EDGAR ,  FedStats - Statistics ,  Hoover's Online ,   Claritas , and  comScore SurveySite .    Many local libraries have databases that can give you information on publicly owned companies.  The Michigan Manufacturers Directory will give you basic information on companies by product and by area.  After you have investigated the market thoroughly and you have developed a product prototype, you may want to invest in specific market research testing.  The Small Business Sourcebook   is a excellent  reference tool and available in most  libraries .  It has trade associations, trade shows, advice from owners in your specific business -- it is a must for small business research. 

MANAGEMENT AND ORGANIZATION PLAN

People can make or break your company.  Business owners give careful consideration to the hiring of key personnel or "principals." There should be a listing of key employees, describing the experience, education, and strengths of each person.  You should include a job description and a delineation of duties and responsibilities. Include any outside consultants you will be using.  You may want to set up a volunteer advisory board.  List amount and type of compensation in salary for key employees.  This can be in stock or stock options, benefits, bonuses, profit sharing etc.

The plan should show clearly who is responsible for basic business functions such as marketing, personnel and finances.  You will need to determine if you want divisions of responsibility by product line (electronics division, widget division) or by function  (a marketing department, an accounting department, a production department, and a personnel department).  When you are preparing these items for investors, focus on the skills of the managers to show how the management team will provide excellent leadership.  Typical items include:

• Goals and structure of organization
• Communication and reporting systems
• Work environment

FINANCIAL PLAN

Most manufacturing and retail businesses do not start to make a profit until having been in business for at least 2 years.  The reason is that there is a lot of overhead involved in purchasing a store, inventory, and personnel.

Service businesses may make a profit sooner, since they tend to have less initial financial outlay. The point at which profits become greater than costs and overhead is called the " break-even point ."  Frequently a start-up business does not know when the break-even point will occur, so it is not essential to the beginning business plan.

The financial part of your business plan is extremely important. From these projections you will make a budget. That is why your business plan should be realistic.  You won't want to be keeping up with a plan that has unrealistic projections after you start your business. It is better to give yourself some room when you are starting a business. 

The financial plan is critical for raising cash. The business plan is both a realistic analysis of the company's future and a sales paper.  It cannot forsake a true financial picture to be great advertising copy. You will have to be true to both of these aims. Re-evaluating how your business plan is keeping up with your original goals yearly, quarterly or monthly should help your business.

Investors will be very interested in how the money will be used and how the business will be doing.  The financial part of the business plan is more standardized than other sections.   There are standard financial forms such as cash flow statements, income projections and balance sheets.  Include former tax forms if you have been in business prior to the plan. Have a section on start-up costs.  Describe how you will be repaying the loan and include a timetable.  The  Michigan Small Business & Technology Development Center  in your area should have samples of these forms in spreadsheet programs.  You should have an accountant help you with these, or at least review your statements.

Now it's time to get moving on your plan.  Begin on the section which interests you the most and start writing to avoid the "terror of the blank page."   You can always edit what you have said, but just like a term paper, it helps to get something down on paper first. You can always start the Introduction later.  In the end, your business plan should be trying to convince, sort of like a lawyer presenting a case in court, except you are describing why your business will succeed, section by section.  You will be repeating some of the basic information from section to section, but this takes place in all business plans.  Each section should have its own distinctive emphasis.  Try to have fun with this and express your enthusiasm for the business.  At the same time be sure you back up what you say. When you have a draft, get friends to review your plan.  When you have a final draft, give it to your accountant and attorney for review. Pay special attention to the summary and to the financial section.  After you have the plan, use it to guide your business along -- don't let it gather dust in a corner.  After all it is your road map to success!      

BUSINESS PLAN SOFTWARE

There are some popular software programs such as  Business Plans Pro ,  BizPlanIt , and  Ultimate Business Planner  that can give you some ideas for business plan development.  The visual side of these software programs is interesting.  You can take some areas of your plan that you would like to emphasize and make eye-appealing charts or graphs.  Standard financial forms are also included to help you with projections and other variables.   In using software, however, you want the plan to retain its individuality. So use the software as a guide rather than a strict regimen.   BizStats.com  has free and instant business statistics that may be useful in your business plan.