Business Planning - Creating a Roadmap for Your Business 

From Tapping Your Inner Entrepreneur
by Diane Sears, in NAWBO's Entrepreneurship Trilogy

Why do some women seem to zoom to the top of their fields and turn their businesses into multimillion-dollar corporations while others struggle to maintain one-person companies? Is it luck? Timing? Education? Money?

It might be a little of all those things. But mostly it's because of planning. Setting your goals in writing and doing what your schoolteachers always instructed you to do - your homework - makes all the difference in the world.

Whether you plan to sell canned fruit out of your home kitchen or run an architectural firm that designs resorts around the world, you need a roadmap of where you want to go and how you intend to get there. Otherwise, how will you know whether you've made it?

Case Study

Gourmet Kitchens/Last Minute Gourmet
Chicago, Illinois
Lisa Johnson, President

Year formed: 1987

As college sophomores at the University of Missouri-Columbia, Lisa Johnson and her boyfriend vowed they would start a business together someday. They grew more serious about their plan as graduation approached. But they needed money. They decided to work after college until they could save enough to get started.

They got married and he landed a job in Chicago as a civil engineer helping design nuclear power plants. She had a degree in education, but Illinois was laying off teachers in the mid-1980s, so she found work as a customer service representative at a 80-employee site of a corporation that sold engineering supplies.

The couple lived on her paycheck and saved his. They started working on their business plan, visiting the library to research what it should look like and what kinds of information to put in it. The goal: to start a healthy fast-food restaurant in downtown Chicago that they could develop into a national chain and franchise.

The hardest part for them was writing the financial portion, Johnson says. "Before you start a business, no matter how much research you've done, no matter if you've been in that business prior, it's really difficult the first time. Until you have some experience under your belt, it's hard to figure out all the costs and to judge how your sales are going to work."

Neither of them had experience in the food industry, although he had washed dishes at a Red Lobster for three weeks. But he was passionate about food and she liked the idea of having a storefront where they could greet customers.

In her job, Johnson received three promotions in her first few months and then hit the top of her pay scale. There was nowhere for her to move up. Restless after a year, she applied for a receptionist position at an entrepreneurial software company with about 20 employees. The owner looked at her resume and hired her for his marketing department instead, where she soon became the director.

About two years later, Johnson and her husband had saved start-up capital and back-up cash of about $300,000 between their savings and their credit card limits. It was time to start their restaurant, the Two Minute Gourmet. Johnson was enjoying her marketing job, where the software company owner had become her mentor and offered his support, coaching her on how to establish and operate a business. But the plan called for her to quit and start the restaurant full time while her husband kept his job until the venture was making a profit.

Her husband was laid off unexpectedly, so they switched roles. In her excitement Johnson couldn't help but dive into the restaurant anyway. She'd start at the software company at 6 a.m., leave in time to work the lunch rush at the Two Minute Gourmet from 11 to 2, stay at the software company till 7 and then go back to work at the restaurant. She was putting in 20 hours some days, sleeping only a few hours a night.

After three weeks, her boss asked her to make a decision. He offered to double her salary if she'd stay. Otherwise, he said, she should resign. As an entrepreneur, he understood her passion. Johnson said goodbye.

"I loved my job when I left," she says. "I absolutely loved it. It was actually really difficult to quit because I was going out into these foreign waters. I had a very comfortable living and really enjoyed what I was doing.

"It had a little bit to do with age. I was young. I had no children. I didn't own a house. It's always in the back of your mind that you could fail. And if you fail, it's easier if you don't have any commitments. If I got thrown out on the street, that was OK because I could get back up."

Johnson dove into the restaurant full time with her husband. She was proud of what they were building. The restaurant had a grand feel to it, and customers often assumed it was part of a well-established, well-funded chain.

However, it wasn't making money.

"We were 27, and our idea at the time was that neither one of us had ever failed at anything before," she says. "A 'B' was considered failure in school. So we refused to admit we had failed and said, 'Let's just keep trying for a little while longer and if it doesn't work out we can always go back to corporate America.' We knew that worst-case scenario, it might take us a month or two to find a job."

At the same time, they went back to their business plan and revamped it - radically. In her job at the software company, Johnson had noticed how difficult it was to get catered food brought in for breakfast or luncheon training sessions. She had called all over town, but no one delivered what she wanted. She asked some of her former clients and even her former employer whether they'd use a service that delivered gourmet take-out for business meetings. She heard a resounding "yes." Their new plan called for closing the restaurant and focusing on food delivery only.

Johnson and her husband sold the restaurant when it was just 10 months old. They got out on a Friday and opened their catering business the following Monday, calling it Last Minute Gourmet.

"For the first business we had a big, long business plan," she says. "We researched everything. For the second one we put some thought into it, too. It looked like we shut down and reopened, but we had tried to figure out how we could save everything. We ended up shutting it down."

They relocated to a less expensive location. With $10,000 in previous month's receivables from the restaurant, they put a rent deposit for their new site, turned on the power, bought some food and started over. The business took off. They paid off their maxed-out credit card debts from the restaurant in two years.

"We made a lot of mistakes our first time," Johnson says. "As much as we studied, neither of us had ever been in the food business. We did a lot of research, but we didn't have a lot of practical experience. We underestimated a lot. We had a bad location. We underestimated how much employees would cost, what the labor would be. Our food cost was high. We made every mistake in the book."

Today, their company has expanded under the name Gourmet Kitchens and trucks food to six states. With 170 employees, it has the largest staff Johnson has ever worked with. That has its good points and bad, in her eyes.

"Before we moved into our current space, three years ago, I knew all of my employees by name and I knew a lot about their families. Now we have about 170 and there are probably 50 or 60 people here I don't know. That's a really weird feeling. I could pass them on the street and not even know they work here. That's the part of the corporate culture I didn't miss at all."

Johnson and her husband still update their business plan annually or more often if they're seeking financing.

"Things change. Things are dynamic," she says. "We'll change focus, which is one of the reasons small businesses tend to be successful and grow so fast. They're more flexible. If we're doing something wrong, we can shut that down and change course in a matter of days rather than having to go through a row of different layers to get it done."

"By the same token, if we're doing something and it's working well, we can put more energy into it. But I already see where some of that is changing just because we're growing. The reason I wanted to go into business for myself, especially when I was getting antsy to start it, was I hated meetings and memos and politics. And now, 17 years later, we have meetings and memos and politics."

The company has come a long way in 17 years. It has evolved many times.

"What hasn't changed is I always wanted to have a big company," Johnson says. "A lot of people ask me, 'Did you ever think you'd be where you are today?' My answer is, 'A lot sooner.' Where we are today I thought we would have been 12 years ago. I thought we could be where we are after 4 or 5 years. It takes a lot longer.

"The first two or three years, when you're plodding along, it's important to know that people who are successful have the same problems you do. It doesn't come easy. You have to keep pushing. You have to keep working at it. Don't give up. You might have to change direction, you might have to do a 180, but don't give up."

What the Experts Say

Johnson and her husband were smart to start out with a detailed business plan, our experts say. Because of their research and extensive knowledge of their financial picture, they were able to determine pretty quickly that their fast-food business wasn't making money.

This allowed them to pull out of their original business and shift to a related company, the catering firm, in a matter of days. They avoided going through a second learning curve. There's little chance they could have maneuvered so flawlessly if they hadn't done their homework.

Many budding entrepreneurs wrongly think they need a business plan only if they're approaching a bank for a loan - and that's a tactical error, the experts say. Operating without one is like driving without a steering wheel. If you're lucky, you'll end up traveling in a straight line and landing in a lush field somewhere. But you're just as likely to veer off into a ditch.

But what is a business plan? And how do you know how to put one together if you've never seen one before?

A business plan defines your venture, identifies your goals, and serves as your company's resume. It helps you allocate resources properly; handle unforeseen complications; make good business decisions; outline how you will repay any money you borrow; and inform sales personnel, suppliers and others about your operations and goals. For more information, see the "Business Plan Basics" article under the Small Business Startup Guide at the U.S. Small Business Administration's website, www.sba.gov.

Our experts will help you get started with 10 basic steps.

Write Your Business Plan

1. Research what to put in it.

People often drag their feet when it comes to putting a business plan in writing. Maybe you've done this yourself. Part of the resistance comes from not knowing what it's supposed to contain. Once you get the answers, you'll have the confidence to tackle the task, our experts say.

Are you a do-it-yourself kind of person? You can research the process at the library, the way Johnson and her husband did, or online. OPEN: The Small Business Network SM from American Express walks you through the process on in a section titled "Creating An Effective Business Plan" in the Starting a Business section of its website at www.open.americanexpress.com. The tutorial describes what to put on the cover page and leads you all the way through to the final touches.

Or would you prefer hands-on help in planning your venture and an outline for what your business plan should look like? Check your local phone book for listings for the SBA and its partner organizations SCORE, formerly the Service Corps of Retired Executives; the Small Business Development Centers; and the Women's Business Centers.

Another resource is the NAWBO book Taking An Idea To Market: How to Turn Your Vision Into a Successful Business Venture by Molly Tschida Brennan.

You can also boost your knowledge and confidence by taking an online entrepreneurship class conducted by My Own Business Inc. at www.myownbusiness.org.

The class is offered for free, or you can pay a fee and receive a certificate saying you passed the 12 sections, which include deciding on a business; the business plan; computer and communication tools; business organization; business insurance; location and leasing; accounting and cash flow; how to finance your business; e-commerce business; buying a business or franchise; opening and marketing; and expanding and handling problems.

2. Identify your end goals, or what you want to accomplish.

Start at the end instead of the beginning, says Patricia Greene with Babson College, which houses the top-rated entrepreneurship program in the world. Where do you want to end up with your business? What are you hoping to accomplish? Are you just looking for a "lifestyle" type of business that will let you work at home while you raise your children? Or are you determined to build an empire that will create jobs and position you as a major player in your industry?

"There's a controversy about whether you have to have an exit plan first," says Greene, president of the Dow Chair in Entrepreneurship at Babson. "There are different ways to start things depending on where you want to go. It's not always a smooth task if you want to change directions in the middle. If you do decide you want to grow and you started as 'lifestyle,' you're going to have to do some regrouping."

Johnson's original goal, for example, was to create a restaurant that could be duplicated, franchised and eventually sold. Once you've figured out your own end-goal, your business plan should answer some key questions, according to the SBA and SCORE:

• What service or product does your business provide, and what needs does it fill?
• Who are the potential customers for your product or service?
• Why will they purchase it from you as opposed to your competitors?
• How will you reach your potential customers?
• Where will you get the financial resources to start your business?
• Your business plan can be 25 pages, 10 pages or just one. It can be bound in leather, or three-hole-punched in a binder, or handwritten on a yellow legal pad. As long as it's in a form you can read - today as well as six months from now when you're reviewing it.

"I do believe in business plans," Greene says. "I don't think they all have to be the fully developed, written-out ones, but I think they're an excellent way for organizing your thinking about the big questions.

"Even if they're not going to write a full-blown formal plan, I ask them to use it as a guiding system to look at where they want to go, how they're going to get there and what it's going to take."

Greene also recommends you talk to a lot of people about your business idea - advisors as well as potential customers who would actually use your product or service.

"When you do the business plan, the last thing you do are the numbers," says Joan Deery, a SCORE volunteer from Hilton Head, S.C. "The value in the business plan is in the planning. As soon as you've finished the business plan, you're going to have to think about changes you're going to make to it because the market itself is changing.

"People think you do the plan, you put it in a drawer and you're done. The takeaway on the business plan is the planning."

With that in mind, the answer to your question is YES. You do need a business plan, no matter what kind of company you're starting or operating, our experts say.

3. Define your competitive advantage.

What kind of product or service will you provide? To answer that specifically, look at the big picture first, says T. Waldmann-Williams with TWW Consulting in Bridgewater, N.J. What do you bring to your industry that is unique?

To figure this out, let's first look at what you learned in your corporate background. No matter who you are or where you've been, you've picked up a one-of-a-kind blend of knowledge, skills, interests, strengths and contacts that add up to a package unlike that of anyone else in the world.

Now how do you translate that into language your customers understand? Get help from your friends, family members, professional associates, potential clients, and other people who know you.

"Find out why people like you, why they want to do business with you," Waldmann-Williams says. "Ask other people. Do informational interviewing."

For instance, if you want to start a graphic design firm, ask people what they've observed about your work style, your talents, your artwork, your organizational skills. Realize that no matter what they say, favorable or not, you're gathering useful information. If others perceive you get testy when you're working on a tight deadline, then you don't want to tout how quickly you can turn a project around. That would just create stress for you.

Instead, highlight your strengths of working with a team to brainstorm ideas and your large national network of illustrators, graphic artists, photographers, web designers and printers who specialize in creating cohesive advertising campaigns for the film industry.

You've just discovered your competitive advantage, or the mix of qualities you possess that puts you above the competition. Now test it out. Go back to the people you asked for feedback and say, "What do you think about this?" Keep working on it till you can get it into words and a concept other people can repeat, Waldmann-Williams says. That way they'll talk about you and kick off your marketing.

4. Identify your company's customers and competition.

Who will buy your product or service? And how will you tell potential customers about what you're selling?

Johnson researched the potential client base for the catering business while she and her husband were still operating their restaurant. She simply asked other businesses whether they'd sign up for catering services if she made them available. Their overwhelmingly positive response made her business choice clear.

Like Johnson, Gloria Jenkins of Nashville found her future customers by listening and asking questions. She had often attended business functions with her husband, who owns a company that sells lightning protection equipment. Building contractors who had been buying his products for 30 years kept asking why his company didn't install the equipment too.

Jenkins had already been learning the industry by handling the accounting for her husband's company and sitting alongside him in seminars at national business conventions instead of sunning herself by the hotel pool. One day she told her husband she wanted to create a company that would install lightning rod equipment.

The business would involve a radical change from her 22-year career at Vanderbilt University as office manager for the chairman of the Pathology Department, which handled autopsies and medical specimens. But she knew she could fulfill a need in the industry.

Jenkins went back to the contractors and asked whether they were serious, whether they'd really rather pay a professional company to install their lightning protection equipment instead of taking on the liability themselves. They said yes. So she formed PowerCom Solutions LLC in May 2001 with two contracts already in hand. Today her company has fulfilled more than 140 contracts in 11 states.

Even if you already know your customer base, the way Johnson and Jenkins did, study your market because it will give you valuable insight into your competition and how to beat it.

And here's a twist to that: You also must understand your perceived competition. Even though you've determined your competitive advantage, some of your customers will see your product or service as interchangeable with those of others, says Deery with SCORE.

For example, Wal-Mart positions itself as a mass merchandiser with the lowest prices anywhere. If that's true, then it has no competition. But most shoppers know they can get some of the same items at Target. Those shoppers perceive the two as interchangeable.

This concept will help you study your customer segmentation, or identify several subsets of potential customers for your new business. You need to know these because you might market differently to each segment.

Let's say you want to sell antique furniture. One segment of customers will appreciate the expertise you put into scouring the earth for pieces from the 1700s and bringing them to your store, and they'll be willing to pay the price you ask for these rare finds. Other customers won't be able to tell the difference between that Rococo Revival table and a look-alike from Indonesia, and they'll probably balk at the price of the "real thing" even if they do have the money to pay for it.

So you shouldn't ignore those second-segment customers, but you might want to go the extra mile to educate them. You could do this by creating a newsletter or sponsoring seminars at your shop, for instance.

Your customers are the ones who will see and appreciate the distinction between your product and others, and be willing to pay the price for that difference.

Once you've identified possible customer segments, you need to see whether you can make the numbers work, Deery says.

"You cannot do any projection of sales without having gone through the process of asking, 'What is my service, what is unique about it, who will value it specifically and do I have any competition in this unique service, and will some of my customers think they can replace my unique service with my competitors' even if I don't think it will be the same?'"

5. Develop your marketing plan.

• The marketing segment of your business plan, according to the SBA, should answer questions like these:

• Who is your typical buyer?

• Where are your customers located?

• What percentage of the market do you need to gain? And can you meet the demands if the market grows?

• How will you price your service or product?

• Will these prices give you an adequate profit?

• Are your prices competitive?

• Are cheaper products available?

• How will you handle slow-paying customers

• Will you extend credit? Will you accept credit cards?

• Who will sell your products, and how?

• What promotional marketing materials will you develop, such as advertisements and catalogs, who will help develop these, and how much will they cost?

• How will your product be made available for purchase and how will it be delivered?

Susan DePue, a marketing coach in Nashville, recommends the Guerrilla Marketing book series by Jay Conrad Levinson for practical, easy-to-implement marketing ideas for small businesses. DePue's company, On Target Marketing, gives this "7-Step Marketing Plan for Your Business":

Set the goals. Think about how many customers you will need per day to keep the business going. Then determine the optimal number you can handle. Your marketing plan will need to generate a number between these two. For example, "I will see 30 chiropractic patients a day." Also come up with activity goals such as, "I will do three activities a day to market my business."

• Have a Unique Selling Position. Set yourself apart from all other businesses. It is not enough to have the best service. It is not enough to say that you are going to do what the business down the street does but you will have better customer service or faster delivery. First, so many businesses promise great service that none of us believe it until we experience it. A Unique Selling Position is something that brings people in the door.   For example, "My bakery is the only bakery in town that sells authentic Korean breads." Specialists find it easier to attract customers, to get referrals and word-of-mouth advertising, and to charge more for their goods and services. If you are going to have open-heart surgery, will you want a general surgeon or will you be picky and insist on a heart surgeon? The same rings true with your customers. Become their specialist.
• Know who your choice customer is. The answer to this should not be "Everybody!" For instance in the above example of the bakery, the choice customer is someone of Korean descent, usually.   A great location for this bakery would be in an area populated with a number of people of Korean descent.   It will take fewer marketing dollars when you determine who you are trying to reach.
• Determine exactly what your product is - to your customer. There is a difference in what you are selling and what your customer is buying. Know why your customer wants your product.   People buy what they want, not what they need.
• Determine what you are going to say. This is your marketing message. In developing this, keep in mind that your potential client is listening to only one mental station, WII-FM -What's In It For Me. So tell them in clear terms how your product/service meets their needs, and more importantly, satisfies their wants.
• Develop a systematic marketing program. Doing just one thing to bring in new business is not enough. For instance, running an ad in the newspaper will need to be only part of what you do. Networking and calling on people are two more things you may need to do. Sending out postcards every other month - to the same people - for a year might be the program you choose. Remember in the beginning you need about four different marketing strategies - all going at once. There are at least 100 different ways to market your business.   Only one of the 100 is advertising. Get creative.
• Execute the plan. This starts with a budget and a calendar.   You should have on the calendar what you are going to do when. Realize no marketing plan works. YOU have to work the marketing plan.

6. Study the trends of your industry.

To stay on top of your competition, you also have to know where your industry is going. Study the trends. When Deery from SCORE was at IBM, where she worked for 26 years, the senior management wrestled with the introduction of the personal computer. Executives debated whether customers who bought mainframe computers, those pieces of equipment that took up an entire air-cooled room at large corporations, would ever choose PCs instead. They needed to accurately predict the future of the PC or their business would go under.

Kodak has had to adjust its thinking with the advent of digital cameras, Deery says. Newspapers and other print media have rethought their classified advertising models in the age of Monster.com. Retailers have revamped their storefronts with the increasing popularity of online shopping and concepts like Amazon.com and eBay.com.

Leila Fecho came up with a creative way to handle this task in 1996 when she was forming Above & Beyond Communications, LLC, a marketing firm in Mansfield Center, Conn. She knew from attending the MBA program at University of Connecticut that students split up into groups to put together a business plan for a real or fictional enterprise. So she went back to her alma mater and asked a team of students to help her conduct research.

"We did a lot of work," she says. "I have gone back to it and officially revised the business plan now twice, and I look at it on a regular basis."

Several years ago she asked another team of students to help her update her industry research. As a result, the group suggested her company get more involved in web design to stay competitive. She took the advice.

7. Learn standard accounting principles.

It's almost a badge of honor in some circles for women to say "I'm the creative type. I'm not good with numbers." Deery says it's time for you to get over that and maybe even go back to school for Accounting 101.

Every business owner should know the standard principles of accounting - not just to write your business plan, but to later be able to predict when your company will make money.

"Most people don't have the basic accounting skills - in fact they have no business skills," Deery says. "Most people don't know the difference between sales and marketing. Nothing is taught in public education in these areas. You can go to college and get a liberal arts degree and still not be exposed to this. Yet there is a myth in America that anybody can start a business.

"The worst scenario is people who work night and day seven days a week and they're breaking even for years. That happens."

Even if you don't handle your own bookkeeping and use those skills every day, you should know where your company is positioned financially at any given time.

"This is one of the reasons I see clients who struggle," Deery says. "They don't want to get into it so nobody is doing it. That's one of the biggest risks in a small business."

Why is accounting so important for an entrepreneur?

"You walk away from your salary and now you're going to start a business," Deery says. "You're going to need startup money either from yourself or somebody else to get you through without a salary for a period of time. And then be able to project when you might be able to take a salary and reproduce the income you had at the corporation. You might be talking two years."

Or you've been in business for yourself for some time and you're still struggling and you're asking, "When will I at least break even? Do I have to do this for another year or am I looking at two years? How much longer do I have to struggle? When am I out of the woods?"

"The key is having enough skill to make that projection," she says. "For some women, if you tell them you can make a projection and know how long it's going to take you to get out of the woods, they will be able to do it by going to SCORE and getting the help. There will be other women who cannot. Those women need to learn more about basic accounting so they can get the confidence to make that projection."

8. Develop your financial plan.

OK, so you know accounting. Now it's time to compile the numbers for your business plan. The SBA recommends this section include:

• An explanation of where you'll get your start-up money and how much you'll need.
• A projected monthly operating budget for the first year.
• An outline of monthly cash flow and return on investment for the first year.
• Projected income statements and balance sheets for the first two years.
• An explanation of when you plan to break even.
• Explanations of how you and other employees will be paid and who will maintain your accounting.

That sounds like a lot of work. Can't you get someone to do it for you?

Sure, you could, Deery says. But you'd be cheating yourself. That's why groups like SCORE work on the financial part of your business plan with you instead of for you. It's what she calls an ugly part of the process all entrepreneurs have to go through.

"They have to know every month what money is coming in and what money is going out by category," Deery says. "They have to be looking at the books every month. That is so ugly to 90 percent of the people. I mean, ugly. But they have to do that. If they're not going to do that, they really should not take the risk of starting a business because they could lose a lot of money."

9. Seek ways to learn business skills.

If you're still working for someone else, then use your time in the corporate world to absorb like a sponge and learn on someone else's nickel. Whether you decide to tell your employer ahead of time, the way Johnson did at the software company, or keep your plans quiet because your supervisor wouldn't take the news so well, be aware of any learning opportunities.

"They should keep their eyes open as to how things fit together," Greene says. "Even if they're working in one department, watch how that department interacts with other departments. Watch how people relate to each other, how cultures are built, how systems are created. Understand the history of the firm - if it's a new firm, where did it come from? If it's an old firm, how did it grow?

"Lastly, hopefully they're working within the industry they want to start the business in. Learn the industry and learn the connections. Meet the distributors, meet the suppliers. It may eventually be that you spin off from this company, and these will be your first contacts to using your own firm."

This kind of training will make you a stronger entrepreneur, Greene says.

"Everybody's going to make mistakes. If you can have a safe learning environment first, there's a different kind of risk. Sure, there's some career risk maybe, but you're not risking all your financial capital yet. You can almost look at it as an internship."

You might not have time to go back to school for your MBA to learn all you need to know about being a business owner, says Babson College's Greene, a co-author of the book Clearing the Hurdles: Women Building High-Growth Businesses . But check into the classes offered at area community colleges, university campuses, Knowledge Shop facilities, and area offices of the SBA, SBDC, SCORE and Women's Business Centers.

10. Check your progress.

The SBA has an online interactive checklist at www.sba.gov if you want to quiz yourself on all you've learned so far and figure out what you still need to learn. It's under the Startup Basics section and it addresses seven key components: identify your reasons; self-analysis; personal skills and experience; finding a niche; market analysis; planning your startup; and finances.

Double Check Your Business Plan

Whether your plan is written on a stack of paper napkins or you've kept it in an electronic folder on your home computer, it's time to make sure it's foolproof. That means showing it to some people who are more experienced than you are and letting them try to poke holes in it to make sure it doesn't leak. But first, relax.

"Sometimes we preach so much about the importance of the business plan that I think we intimidate people a bit," says Edward Daum, Minnesota District Director for the SBA in Minneapolis. "They get so involved in writing the business plan that they get discouraged and never get around to starting the business."

Your business plan should reflect the complexity of the business itself, Daum says. For instance, if you plan on selling items on eBay from your home or offering your services as a hiring consultant or a freelance writer, your business plan won't be as complicated as that of your friend who's opening a manufacturing plant for a line of electronic equipment. Hers will address issues yours might not, including real estate, inventory, employee health plans, manufacturing and production equipment, and distribution.

The best business plans, Daum says, are clean, straightforward and realistic. They include an executive summary right up front. They don't try to dazzle with charts and graphs. They don't use technical jargon only found in your industry. And they're not overloaded with explanations of technical processes - although if needed, you can include in-depth information about those in attachments. The best plans simply tell the reader who you are, what your business is about, and how you're going to make it all work out.

And the financials, as always, are key. After all, you're in business to make money, right?

"The capitalization of the business, including sources and uses of funds, should be clear," Daum says. "The operating projections are critical and should include break-even sales, worst-case scenario, best-case scenario, and the most likely scenario."

Checklist

• Research what a business plan looks like and what information it contains.
• If you're not comfortable with the analysis that goes into starting your business, take an online course through www.myownbusiness.org or enroll in classes through a local college or the SBA, SCORE, the SBDC or the Women's Business Centers. These are designed for career people who can't take time out to pursue an MBA but need to learn or brush up on basic skills.
• Decide what you want your business to accomplish - such as fulfilling a temporary need to fit into your lifestyle or developing into a long-term enterprise.
• Create your company's "competitive advantage" by asking people who know you for feedback to help you discover your strengths.
• Examine and list your company's customers and competition, as well as industry trends that will affect your product or service.
• Learn the basic principles of accounting so you can handle the financial part of your business.
• If you're still working for someone else, start observing everything around you and absorbing information you can use when you start your business.
• Write your business plan! Get help tweaking it from another entrepreneur or a counselor from one of the organizations that helps entrepreneurs, such as the SBA, the SBDC, SCORE or the Women's Business Centers