The Secret to a Successful Business Plan

The Secret to a Successful 

Business Plan

As a small business owner or future one, you will experience the opportunity to write a business plan. It is not an evil invention of the financial or business industry full of hoops to jump through to delay your dreams. It is a tool to help you evaluate your idea’s potential before you take to the bank or share it with other potential partners.

A business plan is the tool to help you see how feasible your idea is and if the local community or target consumer is ready for you. The great thing about a business plan is when you reach that stage, you already know a lot about the idea and it can simply become a way to write down what you know in an organized fashion. You get to realize the gaps you did not know about and start to fill them in with new knowledge.

Each plan is a custom one because no one business is exactly alike. All lady dress shops are not alike just as jewelry stores are not the same. Your business will not be the twin of the same concept down the street. With that in mind, you usually have three choices in writing the plan: 1) hire someone to do for you, 2) purchase business plan writing software or 3) write it yourself. It is strongly encouraged, you write it yourself to have the most knowledge of the plan and ideas and are better able to answer questions regarding the plan.

There are seven main sections of a business plan. The executive summary which capsulizes the plan and is written last is the first section. The second section is the business description where you talk about the industry, the company and the products/services to be offered to the target customer. The third part deals with marketing and how you plan on reaching the target customer. It is here you will show the need for the product/service and how many potential customers are in the market. A customer profile is usually included here also. Your pricing strategy is discussed along with your sales strategies.

The fourth part is a study of the competition. Competitive spying is legal as long as you do not break any laws according to the law books. You need to know who are your current competitors as well as any potential future ones who currently have no storefront but could be coming. The fifth section deals how you plan on managing the business and the structure. You will also talk about the management team. Every industry has its own set of risks so you need to address them in the sixth section.

The final section deals with financial projections and statements. You may want to enlist the assistance of a banker, accountant or a business counselor to help you prepare the necessary statements for this section. They are a balance sheet, profit and loss and cash flow and three years of projections.

A lot of research goes into writing a business plan to help make it a solid document so a potential funder will consider providing the necessary funds. As a small business owner, you are not alone in this venture. You have many resources to help you, bankers, accountants, business advisors and small business development counselors. All have the ability to provide assistance to help you move along in the writing.

Your local Small Business Technology Development Center business counselor is available to discuss your options and provide many services. All you need to do is call 573-243-3581 and ask for Richard Proffer. 

Funded in part through a cooperative agreement with the U.S. Small Business Administration. All opinions, conclusions or recommendations expressed are those of the author(s) and do not necessarily reflect the views of the SBA. Programs are extended to the public on a non-discriminatory basis. Reasonable accommodations for persons with disabilities will be made if requested at least two week in advance. Contact Richard Proffer, University of MO Extension, 684 West Jackson Trail, Jackson, MO 653755 or at 573-243-3581.

How to Keep Trade Secrets (Secret)

Small Business Trade Secrets

Every business, whether large or small, has a secret considered vital to success. It could be a family recipe for a meat dish that has a special spice or a new way to create a rubber product cheaper but yet it lasts just as long. Whatever it is, it is of value to the business and is often considered to be one of the most important assets when the business is up for sale.

Unfortunately, trade secrets cannot be easily and universally defined. The real definition comes from the fact the following three tests on the idea: is kept secret, is considered important and necessary for the business’s success and has a value to it. Those three tests must be met for a court to protect the trade secret in a legal issue.

A trade secret can be almost anything used in the business or created by the business as long as it is not generally known in the industry. For example, if a business owner creates a new recipe using pinto beans for a homemade chili, it will not probably be considered a trade secret because 1) chili is common, 2) pinto beans are common, and 3) most importantly, it is common knowledge you can use pinto beans in chili. What a trade secret does is provide the business owner with a competitive advantage and allows it operate a higher profit margin usually.

Trade secrets are treated differently than copyright or patents. As long as they are kept secret they remain valuable to the business. But that value can diminish when a competitor has figured out how to duplicate the process. Once discovered independently, the once trade secret can be used without any legal action being able to be taken unlike the copyright or patent. If obtained illegally, then the owner has the right to take legal action and claim damages.

How can a business protect its secrets? The first step is to determine what in your processes create a trade secret. Unfortunately, the information gathered in creating a product cannot be labeled as one as it usually represents skill or industry practices. Courts also protect an employee’s rights to carry with him his experience from one employer to another or her own business.

The second step is to write them down in a log and indicate who knows the secret. The business owner needs to make sure all the people on the log understand the importance of the secret to the business and they are not to disclose the information.

While no protection plan is entirely safe, the starting of one should indicate to the staff the owners are serious about protecting the secret and its importance to the business.

Your local University of Missouri Extension Small Business Technology Development Center can assist you in identifying and classifying trade secrets through its programs. For such assistance, please call 573-243-3581 and ask for Richard Proffer. 

 

Social Media becoming a Popular Tool for Small Business Development

Social media is becoming a huge tool for Small Business Development and even a bigger tool to stay connected with peers or colleagues. There is Facebook, Twitter, LinkedIn,  Blogging, etc. however, business owners aren't sure when or how to use social media to promote their business. Each social media engine is used for different sets of skills and different types of promotion. I found an article online that may be of help for business owners to improve their social media skills. This article discusses the differences between Facebook and Twitter and has good tips and advice for small business owners who are clueless to social media. Now, use these tools to help promote and grow your business.

Social Media Tips

Let me know of your thoughts on social media and small business development.