A Business Plan is a Roadmap to Success

By Ione Villegas, Innovation Coast Staff Writer

Dr. Bob Perkins Assistant Professor of Management at the University of West Florida

8 items to include in your successful business plan

With the Innovation Awards business plan competition approaching on April 12-13, businesses have a huge incentive to write and submit winning business plans: more than $250,000 in cash and prizes, including consulting and technical services.

Too often, startups put off writing business plans that can be a roadmap to success. In today’s competitive business climate, it takes more than a great idea to succeed.

Dr. Robert Perkins, assistant professor of management and entrepreneurship advocate at the University of West Florida, said planning is the critical path to understanding your business before you have real data from the marketplace.

“Business owners should write a business plan because magic happens when all of their ideas are expressed in a model that communicates it clearly to potential team members, customers and investors," Perkins said. "This feedback will generate revisions and contingencies that will prove vital to their success.”

A business plan doesn’t guarantee success, but it can increase the odds of getting your business off the ground. The Panel Study of Entrepreneurial Dynamics, a national survey of more than 800 people who were in the process of starting businesses, found that people who wrote plans were more than 2 1/2 times more likely to get into business. 

Perkins, a business consultant and researcher with decades of experience, said the fast track to failure is believing that a great idea and funding is all you need to launch a thriving business.

"We’ve learned that a thorough planning process is an elixir for the entrepreneurial mind," he said. "It stimulates in-depth consideration of key variables, including the specific target audience, a marketing and sales strategy, the process for making the product, key customer service ‘touchpoints’ and the formulation of a truly differentiated brand.”

As the regional director for the Florida SBDC at the University of West Florida, Kelly Massey works with businesses in various stages of the life cycle to prepare business plans.

“A business plan is a roadmap for your business and should be updated or reviewed every couple of years to keep you on track,” Massey said. “For any pre-venture, we recommend writing a prelude to a business plan, called a business model canvas.”

A business model canvas is a tool that fleshes out a startup’s value proposition, distribution channels, target markets, cost structure, revenue stream and business partners. This strategic planning exercise is used by Fortune 500 companies to help identify opportunities and stay ahead of the curve, Massey said.

Celebrating its 40th anniversary in 2016, the Florida SBDC Network helps small businesses succeed by providing training, resources and no-cost consulting services, including business plan assistance, market research and analysis.

The Florida SBDC also provides consulting services to startups competing in business plan competitions. Massey recently coached Lloyd Reshard, CEO of Cognitive Big Data Systems, who won the 2016 Get Started Pensacola event, presented by Cox Business. Next year, consultants at the Florida SBDC Network will also assist startups competing in the Innovation Awards, where Reshard was a presenting finalist in 2014.

Whether you are a new or existing business, Massey recommends doing your homework. He suggests accessing online resources and tutorials at the Florida SBDC Network. The U.S. Small Business Administration and the Florida Department of State Division of Corporations websites are also useful.

Like any task, the most difficult part of writing a business plan is getting started. Business experts Perkins and Massey said there are key items that should be included:

  1. Understand your competition – Conduct market research that identifies your market size, direct and indirect competitors, and data that supports financial projections, Massey said.
  2. Brand centrality –  New companies are an unknown, Perkins said. Unless you are thinking about building your brand from day one, you are very likely to fail. He found new companies that made branding a core strategy grew six times faster than their peers who did the bare minimum.
  3. Know your target – Not everyone will buy your product. Whether you identify customers by geographic, demographic or psychographic data, defining your target market helps you focus your marketing dollars on a customer segment that is more likely to buy your product, Massey said.
  4. Strength in numbers – The road to success is rocky, filled with detours and roadblocks. Perkins said that’s precisely why investors demand a highly capable team—to solve the many inevitable problems.
  5. Protect your assets –  Investors consider a trademark more valuable than a patent, Perkins said. Because it shows a focus on the market. Trademarks exist only in the minds of customers – and that is where sales are made.
  6. Show me the money – If you need $100,000 to start your business, you shouldn’t settle for less. Massey said having insufficient startup capital to run your business is one of the biggest mistakes you can make.
  7. If you build it, they will come – With effective search engine optimization, a website can drive traffic. However, the conversion rate averages only 2 percent, Perkins noted. He suggested you plan videos and actual customer testimonials to dramatize your site, making it vivid and engaging. You should also update your content frequently and build a following through a social media plan.
  8. Set up exit strategy – Before you open the doors, Massey said you need to develop an exit strategy that will minimize financial losses and lock in profits.

To schedule a consultation with a business consultant at the Florida SBDC at UWF, call 850.474.2528 or go to www.sbdc.uwf.edu.  For more information or to register for the Innovation Awards, visit awards.innovationcoast.com.

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