Mashable's latest #BizChats Twitter chat, sponsored by Wells Fargo Works for Small Business discussed how professionals can get their business off the ground with a well-crafted business plan.
[seealso slug="business-planning-bizchats"]
Over the course of an hour, @MashBusiness covered an array of questions, ranging from what the most important components of a business plan are to what financial details are a must for entrepreneurs that are looking to launch their own business.
Several business experts shared their knowledge on the topic including: Brian Moran, founder & CEO of Brian Moran & Associates; Coco Soodek, lawyer, radio host & entrepreneur; Rieva Lesonsky, CEO, president & founder at GrowBiz Media; Terry St. Marie, leadership & business consultant.
Check out highlights from our chat in the Storify, below:
[View the story "#BizChats: How to conquer the basics of business planning" on Storify]#BizChats: How to conquer the basics of business planningMashable hosted a Twitter chat to discuss how entrepreneurs can create well-constructed business plans from scratch. Storified by Mashable· Wed, Oct 07 2015 19:26:01
Every successful business cannot succeed without a well-crafted business plan. As exciting as it is to start a business from scratch, the thought of creating a business plan intimidates a lot of professionals who don't necessarily know all the criteria that needs to be included. Many people tend to place this crucial step of the business-building process on the the back-burner.
Although no two business plans are the same, there are several basic pillars of business planning that should be included. Instead of fearing the unknown, it's time to embrace it and take a step closer to making your business dreams a reality!
@mashbusiness and several business experts participated in a #BizChats Twitter chat to discuss how people can get their business off the ground by creating a successful business plan. Welcome to #BizChats, sponsored by @WellsFargoWorks! Today, we're breaking down the basics of a business plan. Please introduce yourselves!Mashable BusinessA warm welcome to our business experts: @brianmoran, @profitandlaws, @Rieva, & @Starbucker! #BizChatsMashable Business#BizChats tip: Be sure to number your answers according to the question you're
answering. (ie., Q1.-->A1., Q2. --> A2., Q3. --> A3.)Mashable BusinessQuestion 1:Q1. Why is it so important to have a business plan? #BizChatsMashable BusinessA1 How do you know where you're going if you don't have a map? Biz plans show you the way #BizChats #smallbiz #startupTerry St. Mariea1. You need a plan to figure out where you're headed & how you're going to get there #bizchatsRieva LesonskyA1a: A business plan helps you map out every stage of growth, allocate resources efficiently, & share your ideas with investors. #BizChatsWells Fargo SmallBiz"A1: Your business plan is your living roadmap to what, how and why you drive your business forward #BizChats"Profit and Laws, IncA1 Biz plans give you a road map to manage your biz smarter & better, & is a must for raising any significant capital #BizChats #smallbizTerry St. Mariea1. Creating a plan also helps you understand the competitive environment & how you're going to stand apart from them #bizchatsRieva LesonskyA1: Think of your business plan like the GPS app on your smartphone. How lost would you be without it? Exactly!! #bizchatsBrian MoranA1: You not only need a business plan, you need a BACKUP plan! Not everything goes according to your original plan. #bizchatsBrian MoranA1 Having targets in a biz plan are HUGE drivers in putting us in the best situation to succeed, both financially & personally #BizChatsTerry St. MarieA1 I look at it as a road map and with out one it just takes you longer to reach your destination #BizChatsSade Metellusa1. A plan helps you understand how much money you need & for what. You can't create a budget without one #bizchatsRieva LesonskyA1: You know those forks-in-the-road you come to in your business? A business plan will help you decide which fork to take. #bizchatsBrian Moran@mashbusiness #BizChats Putting your thoughts in writing with a benefit plan is the only way to share your passion.Jilly Jesson SmythQuestion 2:Q2. What are the risks of not creating a business plan? #BizChatsMashable BusinessA2A: Without a BizPlan, you'll lose your way - frequently and inconveniently. #BizChatsProfit and Laws, Inc@mashbusiness Q2. Possibly not able to get external investments. #BizChatsJoe Sabadoq2. If you need funding, the big risk is you won't get funded #bizchatsRieva LesonskyA2B: Without a BizPlan, you won't have made your case (to yourself and the world) that your vision = a real, legit business. #BizChatsProfit and Laws, IncA2C: Without a BizPlan, you'll have nothing to show investors or banks when you have an urgent opportunity and/or need for cash. #BizChatsProfit and Laws, IncA2a: Being unprepared. Business plans help you prep for many scenarios. Without one, you can’t be proactive in avoiding problems. #BizChatsWells Fargo SmallBiz@mashbusiness #BizChats A2 the biz plan should be ever evolving, flexibility and adaptability, but still a clear plan of actionRicky Shaha2. But perhaps more impt. w/o a plan you'll be operating from the seat of your pants. You want be able to move strategically #bizchatsRieva LesonskyA2 No biz plan? You will miss costs & revenue opps,you risk running out of money, & you can lose your vision & direction #BizChats #smallbizTerry St. MarieA2: If you don't have a solid, working business plan, you GREATLY increase the risk of making expensive mistakes in your co. #bizchatsBrian MoranA2b: Business plans may also help you obtain financing. Some lenders require them for larger loans and lines of credit. #BizChatsWells Fargo SmallBizA2c: As an example, to apply for an SBA loan, lenders may require a formal business plan. #BizChatsWells Fargo SmallBiz@mashbusiness A2 Risks? Not knowing who you are, why you exist, how to compete, how to attract funds, how to maintain relevance #BizChatsIdeonA2: Not having a biz plan is like a 1,000 mile road trip & not knowing where to stay, the cost involved or how long it will take #bizchatsBrian MoranA2 And, it will be very, very difficult, if not impossible, to borrow money or attract additional capital #BizChats #smallbiz #startupTerry St. Marie@mashbusiness A2 possibly no bank or investments // not knowing the industry or competitors and where your niche market is #BizChatsMichael EstabrooksQuestion 3:Q3. What questions should a small business owner answer in his or her business plan? #BizChatsMashable Business@mashbusiness Who you are, where you're going, how you're going to get there and what you're going to do to capture all of that. #BizChatsJake Counselbaum ☮A3a: Is there a market for my business? That’s why a business plan should always include market research & competitive analysis. #BizChatsWells Fargo SmallBiz@mashbusiness A1: The ability to think of "All the things" and PLAN before you get into day-to-day. #BizChatsJennifer BakerA3A: In BizPlan, answer these 8 questions: 1. Who Is my Customer? 2. What problem does my customer have that I can solve? #BizChatsProfit and Laws, Inc@mashbusiness what you bring differently to the table within your industry + how you are going to attract an audience and customer #BizChatsShaneikaA3: As you put together a business plan, play the "What If" game to stress test it. #bizchatsBrian Moran@mashbusiness A3: Anyone writing a plan should be totally honest about their personal strengths and weaknesses #BizChatsJennifer BakerA3b: What are my goals and plans to get there for my business? A business plan helps you map out your path to success. #BizChatsWells Fargo SmallBizA3B: 3. Is my customer different than my end user? 4. How will my product or service help my customers? #BizChatsProfit and Laws, IncA3: "What If" it takes me longer to hit my revenue goals? How will I maintain positive #cashflow? #bizchatsBrian Morana3. What's your USP? What is special about your biz as opposed to whoever is already serving that market #bizchatsRieva Lesonskya3. How much money do I need to create/buy product? Where will I get it? #bizchatsRieva LesonskyA3C: 5. How will I reach my customer? 6. How will I get my products or services to my customer? #BizChatsProfit and Laws, IncA3) It needs to understand the economics of your investments and confidence in the future demand #BizChats https://t.co/hiHhSCLDZFBob Rothman@mashbusiness A3 who are my competitors, what is my niche, who is my target customer, est min. start-up costs, where is rev gen. #BizChatsMichael EstabrooksA3) It needs to understand the economics of your investments and confidence in the future demand #BizChats https://t.co/hiHhSCLDZFBob RothmanA3D: 7. How much will all this cost? 8. Will my customer pay me for my product or service and, if so, how much? #BizChatsProfit and Laws, IncA3: How much do I plan on spending on the biz over the next 6-12 months? What are my revenue benchmarks? #BizChats https://t.co/HyZqEB7nArDanetha DoeA3: Biz plan should include your emergency plan in case things go far from what is actually planned and envisioned. #BizChatsMichaelQ3 Have a plan on how to sell what you do from the start-what will my profit be fore every item or hour of service? #bizchatsMichael Miller@mashbusiness A3: Address the importance of comparative advantage. What can someone else do better (i.e. bookkeeping, marketing) #BizChatsJennifer BakerA3: what is the value proposition, who is my target audience, why would they consider my product/service? #BizChats @mashbusinessDinesh KulchandraQuestion 4:Q4. What are the most important components of a business plan? #BizChatsMashable Businessa4. for others (lenders) the executive summary. for you--just doing the plan will help you focus your thoughts & goals #bizchatsRieva LesonskyA4a: The 5 most important parts are: company overview, analysis, marketing plan, financial data, & executive summary. #BizChatsWells Fargo SmallBizA4b: Many people leave out the financials, but that’s critical to understand your income, balance sheet and cash flow. #BizChatsWells Fargo SmallBizA4: Critical Components of BizPlan: Customers+Revenue+Operations = Revenue Model (ie Will you make money and, if so, how much?) #BizChatsProfit and Laws, Inc"A4: Here is a great tool: Business Plan Center http://t.co/HA4wizP1Ld #BizChatsProfit and Laws, Inc@mashbusiness A4 what you need to hire for or outsource, market research, competitors, niche, product breakdown, #BizChatsMichael Estabrooks@mashbusiness Articulating how you're doing things "different," how you're marketing it, and revenue projections. #BizChatsJake Counselbaum ☮A4: One KEY part of a biz plan is the strategic goal. It should be specific & measurable (e.g. $500k in sales; 20 new accounts). #bizchatsBrian MoranA4: The 2nd key part of a biz plan is the Operational Plan. It shows how you plan to get from here to your strategic goal. #bizchatsBrian MoranA4: the Operational plan is your GPS device. the final plan will look nothing like the original one. LOTS of changes!! #bizchatsBrian MoranA4 Put together a profit & loss statement, a cash flow projection, and projected balance sheet and you'll have what you need #BizChatsTerry St. MarieA4: A timeline of goals with due dates are important. Everything else will fall in to place with this. Just get your goals done! #BizChatsMichael@mashbusiness A4. 1.Problem Statement 2. Solution 3. USP 4.Competition 5. Customer Acquistion Strategy 6. Revenue Model #BizChatskcpravin@mashbusiness A4) #BizChats Consumer want and need before they know what that is yet.Jilly Jesson SmythA4: You must review your operational plan every month and ask "Are we getting closer to our strategic goal?" #StayOnCourse #bizchatsBrian MoranA4 And banks will toss the "EBITDA" term at you -that means "earnings before interest, taxes, depreciation and amortization" #BizChatsTerry St. Marie@mashbusiness A4 Vision; product/service description; differentiators; market anal; team; marketing; SWOT; cash flow/proj; summary #BizChatsIdeonA4 And that P&L MUST have your gross margin revealed, then your other expenses #BizChats #smallbizTerry St. Marie@mashbusiness A4: Explaining your idea simply. #BizChats http://t.co/eEX4VQcCV4Jennifer BakerQuestion 5:Q5. When doing competitive research, what are the things to consider as a small business owner? #BizChatsMashable BusinessA5A: Knowing your competitors helps you know your business - Check out this article: http://t.co/uAkUbpsLDK #BizChatsProfit and Laws, IncA5: Who are my 4-5 biggest competitors and why do customers buy from them? #bizchatsBrian MoranA5a: What products or services do your direct & indirect competitors offer? And how can you differentiate your business? #BizChatsWells Fargo SmallBizA5: Where does MY company rank in terms of the competition? Am I biggest? New kid on the block? In the pack? #bizchatsBrian Moran@mashbusiness A5: Accept the fact that you will have direct + indirect competitors. Figure out what you can do/offer differently #BizChatsJennifer BakerA5b: Who are your customers and major competitors? You need to know both to develop a targeted marketing strategy. #BizChatsWells Fargo SmallBiza5. You should never FEAR competition. #bizchatsRieva Lesonskya5. #1 question is how will you be different? Why should clients & customers of these businesses switch to you? #bizchatsRieva LesonskyA5. Market cap, uncontested segments, price points, distribution network, annual reports #BizChatsDinesh KulchandraA5C: Just because someone else is already doing it doesn't mean you can't do it better. #BizChatsProfit and Laws, Inc@mashbusiness A5 what do my competitors excel at; comp. weaknesses; comp product pricing; growth of competitors; market shares; #BizChatsMichael EstabrooksA5: Key question: What's my Unique Selling Proposition (USP)? What's the ONE thing that separates my biz from competition? #bizchatsBrian MoranA5: Find what your biggest competitor is doing wrong and focus on it. Usually a good starting point. #BizChatsMichaelA5 Look at others in your category to find a unique niche that sets you apart- need to find your "magic bullet" #BizChats #smallbizTerry St. MarieA5)Cost Effective Resource Suppliers,Marketing strategies,Promotion Tactics.Product Development plans,Etc #bizchatsM£RCCORPA5E: What other industries can I steal ideas, techniques, and revenue models from? #BizChatsProfit and Laws, Inc@mashbusiness A5: The criteria you select to identify and evaluate your competition. Look for future threats and partners. #BizChatsEduardoPujol@mashbusiness A5 Competitor profiling - products, pricing, strengths, weaknesses, market share... #BizChatsStarTex SoftwareA5: Lastly, where is my market going? What are the economic indicators I should look at? How do I get out in front of the wave? #bizchatsBrian MoranA5 - There are niches in ALL businesses, you just have to work hard enough to find them #BizChats #smallbizTerry St. MarieA5D: What are your competitors missing? A particular segment, a feature, a mission? #BizChatsProfit and Laws, Inc@mashbusiness A5) #BizChats Review all the competition and connect with how your passion is unique and different.Jilly Jesson SmythA5 - need to know the market place perspective: what differentiates you from others & your value. Why you #BizChats https://t.co/MC3uMltR4KBob RothmanA5B: Legal is expensive and hard - competitors may have cash for lawyers to figure out risks and disclaimers - study what they do.#BizChatsProfit and Laws, IncA5. What the competition is not doing, that you creates an opportunity @mashbusiness #BizChatsCOMMS BARQuestion 6:Q6. What financial details are a must have for entrepreneurs when first starting a business? #BizChatsMashable Business@mashbusiness A6 working capital, cash available during first year (pref 3 years), cash flow in first year, revenue drivers, #BizChatsMichael EstabrooksA6 You absolutely, positively need to know how much cash you need to successfully run the 1st 6 months of operation #BizChats #smallbizTerry St. Marie"A6: Biggest Det: Your Revenue Model: How will revenues beat cost to catch customer, deliver & produce, manage risk and operate? #BizChats"Profit and Laws, IncA6a: Every business plan should include projected revenue & operating costs. These will help you budget & set business goals. #BizChatsWells Fargo SmallBiz@mashbusiness A6: Calculate the Break-even point. Make sure it is a feasible + profitable business idea. Conservative assumptions #BizChatsEduardoPujolA6: A major detail is that you might not make any money for the first few months. #BizChatsMichael@mashbusiness A6: The cost of doing business - how much does it take to operate a business? #BizChatsJennifer BakerA6b: You’ll also want to understand your sales forecasts and cash flow to make sure you’re planning for the future. #BizChatsWells Fargo SmallBizA6: Two Words - CASH FLOW! It is the fuel that drives your business. Don't ever let your tank run dry. #bizchatsBrian MoranA6 And leave no stone unturned in determining all your expenses - so many can creep up on you #BizChats #smallbizTerry St. MarieDo you have a resource we can share about cash flow planning? #BizChats https://t.co/ClkNaqJaHXDanetha DoeA6: You have to keep two eyes on payables/receivables. If cash is delayed coming in, don't let all your $$ go out. #bizchatsBrian MoranA6 The biggest mistake #entrepreneur & #smallbiz make is underestimating the $$$ they need. THAT's why a biz plan is so necessary #BizChatsTerry St. MarieA6: Don't be afraid to say "no" to a big potential customer who will tie up your resources and not pay you for 90-120 days. #bizchatsBrian Moran@mashbusiness A6 Growth strategy, budget, sales forecasting, cost-benefit analysis... #BizChatsStarTex SoftwareA6: Looking ahead, if receivables dry up, think twice about making an expensive purchase. Can it wait? #bizchatsBrian Morana6 so cash flow is KING. how much will you need in a contingency fund? You need savings built up #bizchatsRieva Lesonsky@mashbusiness A6: they absolutely need to keep track of owners equity, especially if the goal is to attract investors. #BizChatsEmerald PacificA6: Rule of Thumb: Calculate the time and cash. Multiply by 3. #BizChatsProfit and Laws, IncA6: Having a realistic cash flow plan! Plan ahead, then double that amount, always look ahead and prepare! #BizChats https://t.co/iqGpmnMm7APalo Alto StaffingA6: Set aside a reserve of cash for returns and mistakes. Hit Shappens. #BizChatsProfit and Laws, IncQuestion 7:Q7. What type of mentors or support systems should new entrepreneurs look for when crafting a business plan? #BizChatsMashable BusinessA7A: You need 5 people: 1. Connector (who knows people) 2. Mentor (who will answer your smart and dumb questions) #BizChatsProfit and Laws, IncA7a: Ask someone who’s been there before. Fellow small biz owners know what lenders & investors are looking for in a biz plan. #BizChatsWells Fargo SmallBiz@mashbusiness A7: People who inspire you to be awesome. An economics prof in my undergrad @BrockUniversity was my inspiration. #BizChatsJennifer Baker@mashbusiness Surround yourself w/ successful people you know to learn and model their success & network on social media too! #BizChatsJake Counselbaum ☮A7b: There are many local and national business orgs that can help guide entrepreneurs. Make sure you connect with them. #BizChatsWells Fargo SmallBizA7B: 3. Cheerleader (who roots for you and cheers you up) 4. Worker(s) (who do mundane stuff to free you up) #BizChatsProfit and Laws, IncMore businesses should consider hiring remote consultants especially for online work. They really benefit companies. #BizChats @mashbusinessLaura Marie"A7C: 5. Competitor (who's doing some or all of what you want to do (it's okay to dislike that person a little)) #BizChats"Profit and Laws, IncA7: You should look for people who have done it before and people who are positions you plan to be in. #BizChatsMichaela7. Mentors are essential. I always recommend SCORE. @Scorementors. FREE help & adivce #bizchatsRieva LesonskyA7 - Above all else, don't be afraid to ask for help in your biz community - we all want you to succeed! #BizChatsTerry St. MarieA good accountant is gold. Consult them on payroll, tax planning, investment structure. #BizChats https://t.co/IlqmEdXcysProfit and Laws, IncA7: A solid board of advisors will save you from making expensive, biz threatening mistakes. Surround yourself with smart people. #bizchatsBrian Morana7 Also Small Business Development Centers provide free counseling #bizchatsRieva LesonskyA7. People that can add new perspectives. Don't always pick mentors from existing network or industry #BizChatsCOMMS BARA7: LOTS of great answers from my fellow panelists. The key here is to create a board of advisors to help you run your biz. #bizchatsBrian Moran@mashbusiness A7 find a mentor who has fully succeeded in industry; speak to professors at major universities to direct to conf. #BizChatsMichael Estabrooksa7. Almost everything you need to know about business plans can be found at http://t.co/shBvKuQPg1 #bizchatsRieva Lesonsky@mashbusiness Q7 a great salesperson who understands the sales process #bizchatsMargaret AbrahamsThose who embrace risk & are willing to fail BUT also have a track record of success & will be straight #BizChats https://t.co/jbD24LY86QBob RothmanA7: Always have the urge to LEARN You can never have too many mentors who have walked the path before you! #BizChats https://t.co/xwdO5Ey3Y4Palo Alto StaffingQuestion 8:Q8. What final tips do you have to make the process of creating a business plan simpler and easier? #BizChatsMashable BusinessA8 - Big tip: Write a vision statement first. In longhand, one page. Draw a picture first, then fill in the details #BizChatsTerry St. MarieA8A: Final Tip 1: Start. Small. Don't write a masterpiece - write a guide. #BizChatsProfit and Laws, IncA8B: Final Tip 2: Set Your Mission - decide what is important to you - the rest is just intinerary. #BizChatsProfit and Laws, Inc"A8D: One More Thing! Your business plan is always in draft form, never final. Keep improving. #BizChats"Profit and Laws, IncA8b: Business plans should evolve and change as your business goals and needs change. #BizChatsWells Fargo SmallBiza8. MOST impt: Don't put your business plan in a drawer. Refer to it. Update it as your #smallbiz grows. It will keep u on track #bizchatsRieva Lesonsky@mashbusiness Work w/ trusted advisers, friends, mentors, fiduciaries & anyone you think has your back. No shame in getting help. #BizChats.Jake Counselbaum ☮@mashbusiness q8. Don't need to reinvent everything and don't have to do it alone. #bizchatsJoe Sabado@mashbusiness A8: Dream big. Be honest. Be realistic. Simplify. #BizChatsJennifer Bakera8. Don't be intimidated by the process. Software makes biz planning much easier #bizchatsRieva LesonskyA8a: There are many resources to help you create a business plan, like our Business Plan Center: http://t.co/3NvfW5tuQQ #BizChatsWells Fargo SmallBizA8: Don't worry about it being perfect. Do some research, write down your goals and get started! #BizChatsDanetha DoeA8: Most importantly, stress test your biz plan--and make changes if necessary. Play the "what if" game #bizchatsBrian Moran@mashbusiness A8) #BizChat Eliminate clutter, review, all mentors must have your best interest at the core with solutions.Jilly Jesson Smyth@mashbusiness A8 Keep things simple. Stay focused. Ask for help: there are always answers, just learn to pick the right ones #BizChatsIdeon@mashbusiness A8 think big and do not limit what can be accomplished; do it w a mentor or trusted small business friend #BizChatsMichael EstabrooksA8: When creating a business plan, "Take Time to Do Things Right." Don't write it in 10 minutes. #bizchatsBrian MoranA8: Limit the biz plan to 1 page. The less real estate, the tighter the direction & the clarity. #bizchatsJohn R. Bell@mashbusiness A8: Stay alert for new industry trends, create a powerful product definition, consider all of the stakeholders. #BizChatsEduardoPujolA8: Be prepared for unexpected surprises. Have the willingness to put solid time and energy into biz plan. #BizChats https://t.co/3pw70r2xwfPalo Alto StaffingDon't think someone knows better than you. You are on a journey so be free to learn & discover. #BizChats https://t.co/Ylb94L1B0xBob RothmanA8 - Think beyond the target; what is the real purpose of this business, beyond profit? What difference do you want to make? #BizChatsTerry St. Marie@mashbusiness Create a personalised business plan. Put your passions down on paper, then outline a simple strategy. #BizChatsLaura MarieClosing Comments: Thrilled to have been in a Mashable #BizChats with @brianmoran @Rieva @Starbucker. Great insights, smart people. #BizChatsProfit and Laws, IncMy pleasure, I had a blast! May everyone have a great business plan in their future. #BizChats https://t.co/K0TyIl2zi0Terry St. Marie@JenniferBakerCo @mashbusiness this was my first time! When's the next one? #BizChatsDanetha DoeThanks for hosting @mashbusiness @WellsFargoWorks - a really interesting conversation.COMMS BARThanks for inviting me. This was a great discussion @mashbusiness @WellsFargoWorks #bizchatsRieva Lesonsky@mashbusiness You're awesome! Thanks again for another great chat! #BizChats @WellsFargoWorksJennifer Baker@mashbusiness Excellent advice being tweeted thank you #BizChatsJilly Jesson SmythGreat #BizChats today! Excellent tips picked up along the way! Thanks @mashbusiness https://t.co/rUDhAr9nlYPalo Alto Staffing@mashbusiness Thanks Mash, @WellsFargoWorks + experts for this brilliant chat @brianmoran, @profitandlaws, @Rieva, & @Starbucker! #BizChatsIdeonLearning a lot in #BizChats today! @mashbusinessHR Mgmt Institute