Writing Business Plans That Get Results

A Step-by-Step Guide

By Michael O'Donnell

Writing Business Plans That Get Results: A Step-by-Step Guide by Michael O'Donnell is a workbook to help entrepreneurs write their business plans. The book is divided into 14 sections or "modules" which O'Donnell feels should be addressed by a well-written business plan. The modules cover:

• The Executive Summary
  
  
• The Table Of Contents (of your business plan)
  
  
• The Company and the Industry
  
  
• Product and Related Services
  
  
• Technology: Research and Development
  
  
• Market Analysis
  
  
• Competitive Analysis
  
  
• Marketing Strategy
  
  
• Manufacturing Process/Operations
  
  
• Management and Ownership
  
  
• Administration, Organization, and Personnel
  
  
• Milestones, Schedule, and Strategic Planning
  
  
• The Critical Risks and Problems
  
  
• Financial Data and Projections
  
  

Each business plan module gives a suggested page length, the objective of the module, and pertinent questions which the module should address. The "pertinent questions" make up most of the pages of Writing Business Plans That Get Results, and plenty of white space is given to allow readers to answer the questions for their own business.

Under module 4: Product and Services, some of the questions are:

• "What is the purpose of the product/service?"
  
  
• "Does the product solve a problem or address an opportunity?"
  
  
• "Is it a luxury item or a necessary item?"
  
  
• "What is its susceptibility to obsolescence?"
  
  
• "What are the regulatory or approval requirements from government agencies or other industry participants?"
  
  

Under module 11: Administration, Organization, and Personnel, Writing Business Plans That Get Results suggests the following questions:

• "How will you encourage creativity and entrepreneurship?"
  
  
• "How will you foster commitment and loyalty in your employees?"
  
  
• "What is your average or expected turnover?"
  
  
• "What are your administrative policies, procedures, and controls for billings, payments, and accounts receivable?"
  
  

In Module 10: Management and Ownership, Writing Business Plans That Get Results asks:

• "What is the compensation package of each principal?"
  
  
• "Who is on the board of directors?"
  
  
• "What is primary objective of the current owners and managers? (Check and describe)
  
  ____ Sell out in x number of years
  ____ Buy out investors
  ____ License idea for royalties
  ____ Franchise idea
  
  Other _______________"
  
  
  

While some readers might feel they don't need long lists of questions for their business plan to address, other readers will find this question format useful. Each module ends with a short section devoted to "common mistakes to avoid." Avoiding these mistakes will make your business plan more marketable to investors, and other stakeholders in your business.

For example, in Module 3: The Company and the Industry, the common mistakes to avoid are:

"n Including too much detail and personal opinion about the company and not enough on significant milestones and potential.

  n Failing to demonstrate a well-rounded knowledge of major industry players and their potential influence on the company.

  n Appearing to be a fly-by-night operation

  n Evidencing lack of direction and commitment

  n Demonstrating poor or inadequate knowledge of the industry and trends."

Writing Business Plans That Get Results devotes two appendices to the supporting documentation your business plan should have and to preparing financial projections for your business. Both Current Financial Statements and Pro Forma Financial Statements are discussed.

Pro Forma Financial Statements are future projections for your business. As O'Donnell writes, such projections "should be based on realistic expectations." The fatal flaw of too many business plans is that the financial projections simply aren't realistic.

Writing Business Plans That Get Results devotes an ending chapter to "The Finishing Touches" to polish your off your business plan. A short section called "The Investor Test" gives some questions prospective and skeptical investors might have, such as:

• "If this is such a great idea, how come no one else is doing it?"
  
  
• "Why are you in this venture?"
  
  
and


• "Has your plan been critiqued by an accountant, a lawyer, a banker, a management consultant, and/or other professional?"

O'Donnell explains that the purpose of this last question "is designed to find out if this is a one-man show or if you are a team player. Investors want to see that you can access resources and harness expertise. They want to see that all appropriate disciplines are actively involved, which minimizes their risk."

Overall, if you are writing a business plan, Writing Business Plans That Get Results: A Step-by-Step Guide by Michael O'Donnell could be a useful resource. You might also want to buy a copy of Anatomy of A Business Plan by Linda Pinson.