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Building Your Plan
Chanel Yang
L'amour du Vin
Winemaking
"We did everything: we bought a map of the city and put coloured dots on it so we could see what locations didn't have this kind of store. We went to a liquor store to ask people our survey questions. It all went into the business plan."
When Chanel Yang submitted her business plan for L'amour du Vin in a competition, she was looking for two things: the $1, 000 prize money, and the chance to have her plan critiqued by professionals.
"At first, I thought a business plan wasn't very important , that it was just paperwork. But because we wanted to open a winemaking store, and we needed to look at the local market, we visited our competitors' stores looking for their strengths and weaknesses. We started to make notes about the character, the staff, etc. so we would remember." Those notes were the start of her business plan.
When she registered her store's name, Chanel noticed a promotion for Small Business BC's annual province-wide business plan competition. She entered, and spent the next two weeks completing her plan. As a result, she started focusing in on her target market, their needs, a marketing plan and possible locations.
Chanel's analysis turned up an unexpected opportunity – there was market potential for serving the needs of connoisseurs who make their own wine for love of the process and the product. That knowledge determined her location in an upscale neighbourhood.
Chanel won the prize, but the real value was the fact that she ended up with a comprehensive business plan. "I think we won because we had Plan A and Plan B, and we considered what we could do if something didn't work," she says. "Our business plan was very detailed, and now that we're thinking of expanding, I'm looking at those sections again."
If you're serious about having a business, here's where you start. Writing a business plan will help you identify the strengths and weaknesses of your idea, your resources and your situation. It will help you decide if you should pursue your idea, and help keep you on track as you grow. And if you're looking for financing or investors, a business plan is essential.
You can hire someone to draft your plan, but if you can, it's best to prepare it yourself and start getting to know your business inside and out. Take the time to review several sample plans, and make use of one of the templates and models available online or in print.
An online interactive business planner (see Resources) can help you break the task into manageable chunks. Make sure you study the automated financial reports it will generate to learn how they work and relate to each other. You will need to fully understand these reports to answer questions from lenders and investors later on.
A typical business plan includes:
define your business vision;
identify the demand for your product/service;
decide how to price your product/service;
clarify what you need in a location;
determine your budget and financing needs;
identify risks and what to do about them;
and choose an effective marketing strategy.
Over the long term, it will help you establish your business credibility and measure your progress.
Company information: Sets out your company's name, history, size, type of operation (home-based, or commercial), legal structure (sole proprietorship, partnership, incorporated company) and location. See "Making it Official". This part also describes your intentions, which may be expressed in a vision or mission statement.
Product or service information: Describes the nature of your product or service, its key features and benefits and its competitive advantages.
Management plan: Outlines the ownership and management structure of your business. It includes division of responsibilities, resumes for yourself and your management team and contact information for lawyers, bankers or accountants.
Market research and analysis: Describes the nature and size of the industry in which you will operate, growth potential, common costs and profit margins, current trends and future prospects for your product or service. It identifies your potential customers or target market (gender, interest group, location, income level, their buying trends). Explores market trends and unique challenges of different regions in the province that could affect your plans. Analyzes your competitors' strengths and weaknesses and how you measure up. See "Defining Your Market".
Marketing plan: Describes how you intend to present your product or service to your customers, and how will you spread the word: through advertising, trade shows, networking, word of mouth, etc. Includes the pricing, sales and distribution strategy of your product or service. See "Getting the Word Out".
Will you operate as:
a sole proprietorship;
a general partnership;
a limited partnership;
or
a corporation?
The kind of business you set up will determine how you manage accounts, records and much more. For help weighing the pros and cons of each, see: www.smallbusinessbc. ca
Operations plan: Describes where you will run your business (home, office, warehouse, etc. ). Lists licenses, permits and insurance you may need, along with materials, equipment, and suppliers. Describes your plan for production, inventory and staffing, if applicable.
Financial information: Analyzes how much it will cost to run your business and how much you will earn. Includes where you intend to get financing, and what the funds will be used for. Provides essential financial statements you will need to get loans or investors – cash flow projections, a starting balance sheet, a projection of anticipated income, and a break-even analysis. See "Finding the Money".
Risk analysis: Identifies how key risk factors such as the economy, new competitors, supplier problems, technologies, legal issues, personnel turnover – even weather trends – might affect your business. Describes how you will manage those risks.
Implementation plan: Sets out a schedule showing when each step will be completed –financing, finding a location, finalizing licences, acquiring equipment, hiring staff and launching a marketing campaign, along with future milestones for measuring progress.
The elements of a business plan will vary depending on the nature of your business and in some cases, your lender's requirements.
You may spend months writing your business plan, but it will be worth it. Start with the information you have and fill in the blanks as you learn more. The exercise of preparing the plan will guide you to think about all aspects of operating your business, and will go a long way to turning your idea into a reality.
Resources
Templates and Models
- See "How to Write an Effective Business Plan" and "The Business Planning Process" at the Women's Enterprise Society of BC website, www.wes.bc.ca.
- Small Business BC's Interactive Business Planner, sample business plans and other resources are available at http://smallbusinessbc.ca. Follow the "Small Business Guides" link to the "Business Planning" page.
- See "Start and Run Guides" at www.self-counsel.com.
- Community Futures business links: www.communityfutures.ca/links/.
- "Journey to Success – Aboriginal Women's Business Planning Guide" is available in English, French and Inuktitut on the Indian and Northern Affairs Canada (INAC)website, www.inac.gc.ca (see "Publications "). For hardcopies of this publication, call toll-free 1-800-567-9604 (TTY for hearing impaired 1-866-553-0554), or e-mail infopubs@ainc-inac.gc.ca.
- First Business, a site dedicated to B.C.'s Aboriginal entrepreneurs, includes a planning workshop and sample business plans based on First Nations businesses, www.firstbusiness.ca.
Business Counselling
- Women's Enterprise Society of BC offers complimentary business counselling for women, including business plan assessment. Phone 1-800-643-7014.
- A business plan advisory service is provided free of charge by Small Business BC. Call toll-free 1-800-667-2272 (604-775-5525 in Vancouver), or e-mail Askus@smallbusinessbc.ca.
- Many financial institutions provide small business counseling services, often tailored to women, and/or youth and Aboriginal entrepreneurs. Check with your credit union or bank.