How to Draft a Business Plan to Get Your Entrepreneurial Journey Started

Business plans keep new owners on track in their goal of developing a successful company

How to Draft a Business Plan to Get Your Entrepreneurial Journey Started

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The circumstances are perfect. You’re ready to make a major career move. You’ve decided to open your own contracting business.

You have an idea of how to pull it off and the confidence to get started. Now you need a well-conceived business plan to set you on the right path.

Dave Kaster, principal at Fidelis LLC, has written more than a thousand business plans for clients at his business advisory practice in Green Bay, Wisconsin. Kaster says clients need only two things before writing a business plan.

“They need an idea to start with, and they need the time to explore the idea,” he says.

You start with a concept of how to generate money for a particular service or product, and then you make sure that concept passes an evaluation on various levels. If you’re ready to write a business plan, you already know what you want to do. Now you just need to flesh out your ideas by answering five questions: who, what, when, where, and how?

“Who does what? What are you trying to do? When do you do it? Where and how do you do it? But the biggest question is the why,” Kaster says. “Once you decide to do a business plan, that’s what I’d start with: Why are you doing it? Because that gives you the end result.”

Looking to the End

Oftentimes, the most ignored piece in any business plan is the vision for the company.

“You absolutely have to start with the end in mind,” Kaster says. “The first step is understanding the end goal. Decide what you want out of the business, and work backward from there. Let’s say you want to build an excavation business from the ground up and run it for 20 years. You have to determine how you want to get out.”

If you plan to pass the business to your children, it makes sense to invest in a permanent building, expensive equipment, and a long-term marketing campaign.  

It’s a different mindset if you plan to be in business for five to 10 years, retire, and let the company fade away.

“Define your exit strategy and what your ultimate goal is — to pass down to the kids, to sell, whatever — so any investors know exactly the endpoint or determination when and how to get out,” Kaster says.

Doing the Research

To flesh out your ideas, it’s important to do some research. Talking to others in the field is a good first step. Ask them how and why they got started and the difficulties they faced. Kaster suggests contacting a business consultant or marketing specialist to help put together your business plan.

“Picture a good time frame, five to 10 years down the road, and determine what you want your business to look like,” he says. “You need a target to start shooting arrows at.”

One of the first things to decide is the specifics of the type of work you want to do. Do you want to focus on residential or commercial clients, or have a healthy balance of both? Do you want to stick to straightforward hydroexcavation jobs or also get into larger pipe repair and rehab work? From experience, you know what you’re good at; a business plan puts it all down on paper.

The Three Elements

One of the elements of a business plan is a marketing strategy. You’ll need to define who your clients will be and how to reach them.

“Someone could say, I’ll just advertise on social media,” Kaster says. “Who’s going to do that? I haven’t seen a business owner yet who’s done that regularly, consistently and correctly. So you need someone from the outside to really dive in.”

A second element to strategize is operations. Determine how to manage your company in an effective way.

“Working at a business is different than running a business,” he says. “You have to think of things at a different level. You’re not only affecting yourself, you’re affecting the entire business. Clients. Suppliers. Every decision you make has ripple effects.” 

A third element to consider is financing. Decide how to finance your startup and how to use the money to grow your business.

“If you’re going to family finance it, you owe it to your family to write a plan they can keep you accountable to,” Kaster says. “You need to tell them ‘I’m going to keep you safe by following through with these plans.’”

If you seek outside funding, the business plan will have a different emphasis. Investors will require detailed market research, financial projections and operational methods to project the rate of return on investment. Bankers will need proof of cash flow to pay back a loan.

The Different Audiences

In general, business plans are written for a particular purpose and for a particular audience. The first audience is yourself.

“You have to go step by step and prove it out,” Kaster says. “Make sure everything makes sense. It’s always good to solve a problem before a problem comes up, so it’s good to identify what the problems may be.”

The second audience is the money stream. Solid business plans include carefully prepared financial projections, budgets and cost analyses. The average business plan is 40 to 50 typed pages, filled with charts, concepts, and objectives.

“The best function of a business plan is to give you the end goal in mind and give you a starting point to get you through your first 60 days or so,” Kaster says.

The plan serves as a blueprint to identify obstacles and opportunities before you fully commit to the career move that will change your life.



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