Compose A Winning Business Plan Put it on paper so you can put it into action.

Last month in this column, we showed you how to plan a budgetfor your new venture. With the preliminary business decisions madeand your budget information firmly in hand, your next move is toassemble all of your thoughts and numbers into a formal, writtenbusiness plan.

A solid business plan is your road map for success. It chartswhere you're planning to go with your business and how youexpect to get there. Sure, there may be an occasional detour alongthe way, but by focusing on every aspect of a venture'soperations before getting started, you'll be better prepared toavoid making costly mistakes.

Many new business owners view business-plan writing as a taskdesigned to attract investors, but more importantly, it provides aguidebook for your business so you know what you should be doing,and how well you're doing it, along the way. Experts agree thatbypassing the business-plan stage is a recipe for disaster.

As our Starting Smart BIZ Experiencess have learned, composing abusiness plan requires significant amounts of time, patience,research, writing, editing and re-editing. But the benefits faroutweigh the short-lived pressure and pain. Having risen to thechallenge, they are back this month to share their insights aboutpreparing a winning plan.

Vic & Suzette Brounsuzian, Meg-A-Nut Inc.

"The hardest part about preparing a business plan isgetting everything set in your mind about what you're going todo, then organizing and capturing it on paper," says VicBrounsuzian, 44, who, with his wife, Suzette, operates a small shopin Streamwood, Illinois, selling dry-roasted nuts, seeds, finechocolates and other items.

"For me, a lot of time was spent jotting down notesdescribing my business, what I needed to do to get started, and allthe supplies I would need," Vic explains. "Trying to comeup with all of the required financial information was the mostchallenging aspect of the process."

For guidance, Vic turned to the Small BusinessAdministration's (SBA) Small Business Development Center(SBDC). "The gentleman I was working with gave me plenty ofinput, and I followed it to a `t.' I just kept rewriting untilI came up with a business plan that was satisfactory in the eyes ofthe SBDC," Vic states.

Vic says he is pleased with the accuracy of the projectionscontained in his plan. "After my first quarter, I opened mybusiness plan and compared my projections with what actuallyhappened. I was very close to my projections. Even my accountantwas surprised."

Judy Proudfoot, Proudfoot Wearable Art

"The business plan was the most difficult thing I'vehad to do while preparing to begin my business, but I was lessstressed by the time I got it done," explains Judy Proudfoot,45, who, from her home in Alexandria, Minnesota, designs and sellshandpainted clothing using a unique watercolor painting techniquewith acrylic paints.

"Composing a business plan makes you really focus on yourgoals and to think six months or more ahead. It's a challengingthing to do when you're first starting out," Proudfootsays, "but it gives you a clearer picture of what it'sgoing to take in order to accomplish what you want toaccomplish."

Proudfoot became involved with the Foundation for InternationalCommunity Assistance (FINCA) before launching her business, so helpin preparing her business plan was always just a phone call away.Based in Washington D.C. (202-682-1510), with regional officesnationwide, the national foundation provides start-up capital,instructional training and ongoing support to BIZ Experiencess.

"The people at FINCA gave us a four-page worksheet to helpus organize our financial information, and they provided a coupleof charts regarding money matters," she says. "Then theyturned us loose to prepare our business plans on our own, with theunderstanding that we could always call whenever we had questionsor needed additional support."

Proudfoot also uses the business plan as a touchstone. "Irefer back to it monthly. It lets me compare projections to realityand discover what works well, and what needs to bechanged."

Marion Fletcher,

Lets Go Party

"I was so confused, I didn't know what I was doing atfirst," says Marian Fletcher, 55, who has been running aprofitable party-planning and catering service in and aroundBaltimore since early last year. "I had to go everywhere forinformation. The library provided me with different books aboutwhat information goes into a business plan. I wrote to mycongressman; he told me about a booklet, available through theDepartment of Economics' Division of Business Development, thatprovided useful demographic information."

While preparing her business plan, Fletcher happened to beenrolled in Women BIZ Experiencess of Baltimore City (WEB), a localentrepreneurial education program where she received invaluablefeedback on early business-plan drafts. "We composed thebusiness plan piece by piece. The instructors would take eachpiece, mark it up, and explain why it was not yet quite what theywere looking for," she explains. "The wording had to bejust so. At the time I didn't think it was an easy process atall, but I'm glad they did it that way. I certainly learned alot from it."

Fletcher says she referred to her plan extensively during thefirst few months of business, and has since taken the time torevise it. "I found I could get my products cheaper and moreeasily," she says, "and I learned that it was going totake me twice as long to train new employees than I initiallythought it would. I updated my business plan to reflect theserealities so it would remain a valuable document."

Key Components of A Business Plan

As the saying goes, an BIZ Experiences who fails to plan plans tofail. A winning business plan helps you put every aspect of yourbusiness into focus, and avoid costly mistakes. Although no twobusiness plans are exactly the same, all should include at leastthe following five essential sections:

1. Executive Summary, identifying the legal structure ofyour new venture, your needs (in terms of inventory, equipment,working capital and other resources), the amount and purpose of anyrequested loans, and projected timetables for repayinginvestors;

2. Business Description, providing a succinct overview ofthe kind of business you will start, its mission, financialprojections, and how you intend to go about making your business asuccess;

3. Marketing Plan, identifying the target market for yourofferings and the strategies you will use to generate customers.Includes market analysis, with demographic information about yourcustomer base;

4. Competitive Analysis, focusing on the strengths andweaknesses of important competitors, and why your unique businesswill work where others have failed;

5. Financial Overview, specifying what income you have,the expenses you will accrue, and how much start-up capital youwill need. Should also include a five-year financial forecast,consisting of a monthly forecast for the first year of operations,a quarterly forecast for the next two years, and annual forecastsfor the two years thereafter.

Additional sections you may wish to consider, depending on yourneeds, include a Summary of Business Management, spelling out whowill do what; expanded Product and Service Descriptions, especiallyif providing new or unfamiliar offerings; and a thorough plandetailing how you will design and develop new products.

Quality of presentation is key. Word processing is a must, anduser-friendly charts, graphs and indexes are generally quitehelpful. In addition, be sure to identify (and provide solutionsfor) your weaker areas, along with stressing your strong points.This shows potential investors and others that you have reallythought things through.

Contact Sources

Art Printing Co., R.D. 3, Box 447, Rte. 64, Mill Hall, PA17751, (717) 726-4470.

Just Cruises & Tours, (800) 547-7327.

Something Else by Peterene, (617) 293-6413.

Sterling Name Tape Co., P.O. Box 939, Winsted, CT 06098,(203) 379-5142.