Writing a Business Plan

I just want to remind people of the importance of actually writing a Business Plan for each and every one of your potential businesses. The process of doing this will make you think it through thoroughly and prove its validity (or not!).

When we started our main business over 20 years ago we only had $10,000 in the bank, a new house with a big mortgage (we didn’t expect my husband to lose his job out of the blue), a 9-month old baby (I had closed my 7-year old business to be a stay-at-home mom) and my 74 year old mother had just moved in with us. Knowing very specifically how we were going to start a business, what we were going to do to attract and keep customers, and more importantly what the cash flow would be, was essential. We couldn’t afford any surprises…we had no cushion, no room for error. And believe me, when that first box of inventory came and my husband had his hand poised over the check for all of that $10,000 we had in the bank we looked at each other and at least had the knowledge that we had thought it through and were pretty sure it would work. Informed risk is the only type of risk that is worth it.

And, it will also point out (when you do a cash flow analysis as part of your business plan) what can be and is the death of many small businesses…too much success. If you don’t have the cash flow to sustain the growth you WILL go out of business. We had to hold back our growth for many years because we were too much of a risk to a bank to provide us with the LOC that we needed for the full growth potential of the business.

A great source of information on writing a business plan, and information on starting a business is at the Small Business Administration website - www.sba.gov