Put it on paper: a short guide to writing a business plan

Custom Home, Sept-Oct, 2002 by Steve Maltzman

Most custom builders I talk with agree it's important to develop a written business plan. Unfortunately, very few of them sit down and, as the Nike commercial says, "Just do it." But, like other complex tasks, producing a business plan is easier if you take it one step at a time.

The first step is to assemble a group of people to help you develop the plan. While you, as the owner, should control the planning process, you'll need input from inside and outside the organization. If your business plan is going to succeed, key individuals in your organization must be involved in developing the plan and committed to implementing it. As you drill down into the day-to-day systems of your company, you'll need to include all your employees. They must understand the goals of the plan and have their own roadmaps for carrying out their part of it. Look outside your organization as well. Your banker, attorney, accountant, and other business consultants may be willing to share their time and expertise.

Though business plans can take many different forms, I suggest breaking the plan into the following components:

* Present Status

* Sales and Marketing Plan

* Production Plan

* Management Plan

* Financial Plan

* Executive Summary

Setting goals and strategies is the key task within each section. Goals should relate to your company's mission statement, which is the document that states your company's direction and framework. The goals must be realistic, specific, worthwhile, within a certain timeframe, and measurable.

Once your goals have been developed, the next step is to develop strategies for accomplishing the goals, in other words, answering the who, what, when, where, and why for each goal. This includes identifying specific tasks that need to be completed to accomplish the goal, assigning responsibilities for reaching the goal to appropriate staff members, and establishing a timetable for accomplishing the goals.

PRESENT STATUS. In this section of your business plan identify who you are as a company, where the company has been, and where it is today. A good business plan begins with a good, hard look at where you are, asking and answering a wide variety of questions concerning your business. This forces you to take an objective, critical look at what you would like to achieve and the results you expect--and to put it in writing.

Mission Statement. First, tackle the company mission statement, usually the hardest part to write. Before beginning the actual planning process it is important to identify your company's vision, expressed in the form of a mission statement. Mission statements generally describe what the company does, whom it serves, and what makes it special. Here's an example:

ABC Custom Builders creates handcrafted homes for the discerning buyer. We achieve this through the hard work of the most experienced employees in the industry. ABC Custom Builders has been building these homes since 1980 and will maintain this formula for success to ensure our customers have someone to rely on when they are ready for their next home.

Once you have written your company mission statement, expand upon it by identifying your company's overall philosophy and objectives. The objectives of the company are not the goals themselves, but rather they define the parameters in which goals may be set.

Sample objectives for our hypothetical ABC Custom Builders might be:

* Service to clients through the highest degree of professional competence and personal caring.

* Orderly growth through advanced planning and internal controls.

* Communication of philosophy through actions and advertising.

* Integrity through maintaining the highest standards of ethical conduct in every decision and transaction.

Company History. Within this section you will be discussing where your company has been. It should describe how the company started and how it got to where it is today. Discuss the highs and lows and your accomplishments as well as roadblocks encountered.

Organizational Structure. Next, describe your organizational structure, beginning with an organizational chart. Identify the positions and reporting relationships within your organization. Assign names to each of the boxes within your chart and develop job descriptions for each of the functions.

Next, develop a brief resume and a list of strengths and weaknesses for each team member. It is in this section that you also want to work with your employees to help them set personal goals. These goals should not be specific to their position (e.g., sales quotas); they should address how the individual will grow professionally. An example of a personal goal would be to become more computer literate.

The next step is to develop strategies and time frames for accomplishing these goals. What tasks are the individual and the company going to undertake in order for the individual to accomplish his or her goals?

SALES AND MARKETING PLAN. In this section you will look at your market area and the kinds of houses you build, then develop goals and strategies for marketing and selling your services.