Tips and Pitfalls for Writing an Effective Business Plan : Having an effective business plan is essential to the success of any business. That’s why I want us to examine the text entitled “Tips & Pitfalls for Writing an Effective Business Plan“. It is written by Greg Balanko-Dickson, a third generation entrepreneur, Licensed Professional Business Coach and founding member of the Alliance of Professional Business Coaches.
Balanko-Dickson has clients throughout Canada, the United States, South Africa and the United Kingdom. According to the authors, whether you want to start a business or grow it, buy or sell it, attract investors or get a loan, perfect your operation or restructure it, trying to do it without a well-crafted plan is like overkill without a compass. He says this text equips you with the knowledge and tools you need to write your own business plan in no time.
Balanko-Dickson teaches that to be successful in business, you need to research and write your plan; customize plans for almost any type or size of business; master the 10 key components of a successful plan; understand all your financing options; and streamline processes using ready-made worksheets, sample forms, and templates.
The text is divided into five sections of 27 chapters. Part one is generally called “Introduction” and contains two chapters. Chapter one outlines what a business plan is and why you need one. According to Balanko-Dickson, it is an instrument used to document an owner’s intentions and plans about every aspect of a business. He adds that the document itself can be used to communicate plans, strategies and tactics to your managers, partners and investors.
It is also used when you apply for credit, educate the author, explain that the plan contains strategic and tactical objectives, and can be informal or formal.
He added that the plan has an equation structure Goal + Research + Strategy. Balanko-Dickson says a goal simply expresses your intentions or where you hope to end up, but a formal plan details the exact formula you feel you need to put together to reach your ultimate goal.
He explained that his definition of a business plan is “a formal document written to capture and communicate the planned direction and maneuvers that a business needs to achieve its most important goal – profitability”. Balanko-Dickson adds that profit is no accident, and by writing and following your plan, you increase your chances of achieving profitability.
Balanko-Dickson educates that developing a detailed plan will give you the opportunity to form a strong business development strategy, whether your goals are: getting financing to get started; obtain financing for expansion; better organized and increase your chances of success; identify the value of your business and prepare a sales plan; make plans to buy a business; create a management succession plan to facilitate your retirement, etc.
The author identifies ten parts of a business plan as an industry analysis; Market Analysis; products and services; Business description; marketing strategy; operations and management; financial plan; implementation plan; backup plan; and executive summary.
Chapter two is based on the subject of process understanding and preparation. Here, Balanko-Dickson reveals that the benefits of writing plans are often misunderstood. A plan will help you get the money you need when you start a business and will also help you make existing ones more effective, this author educates.
In part two which has the general thematic focus of a ten-part plan and contains ten chapters, namely chapters three through 12, Balanko-Dickson discusses concepts such as industrial analysis; Market Analysis; products and services; business development; marketing and sales strategy; operations and management; pro forma financial plan; implementation plan; contingency and emergency plans; and executive summary.
Part three is based on writing a plan in 30 days and includes three chapters, namely chapters 13 through 15. Chapter 13, like the other chapters, focuses on writing a plan in 30 days. According to this expert, make no mistake, writing a plan can be a time-consuming task because you are planning your business for the next three years, and you want to give it the attention it deserves. He says his personal experience writing plans is that it takes him between 50 and 300 hours to complete.
Balanko-Dickson explains that the more familiar he is with the industry and the market, the sooner he can complete his plans. He adds that if you’re writing a plan for the first time, haven’t been in business before, or are new to the industry, plan to spend more time writing your plan.
He says you can easily minimize distractions in writing your plan by devoting time to writing your plan. The author emphasizes that if you can’t get away from the business, choose a quiet time to work on your plans. In chapters 14 and 15, this author discusses common mistakes in writing plans and working with professional advisors.
Part four is based on a broad topic of special consideration for a particular business and includes ten chapters, namely, chapters 16 to 25. Here, Balanko-Dickson focuses his intellectual attention on concepts such as business planning for investors; retail business planning; manufacturing business planning; planning for wholesale distributors; service business planning; planning for consultants and professionals; planning for large companies and publics, etc.
Section five, the last section, is generally labeled “Getting the money you need” and contains two chapters, namely chapters 26 and 27. Chapter 26 is based on applying for a loan. According to Balanko-Dickson here, small business loans can be used for a variety of purposes. He says for example, a loan can help you buy a business, start a new one and expand an existing one. The author educates that you will be dealing directly with bank loan officers.
“But make no mistake, major small business loans are reviewed by a loan committee. Typically, loan officers are not part of the loan committee…. Understanding your role and the roles of the loan officer and loan committee will help guide you through the approval process. It’s a team game, and, as they say, there is no ‘me’ in the ‘team’,” said Balanko-Dickson.
In chapter 27, this expert discusses the concept of getting funding from investors, family, and friends.
Stylistically, the language of this text is simple, but standard. The presentation is unique. The text is embroidered with graphics to strengthen the reader’s understanding and achieve visual amplification. Balanko-Dickson includes a “Tip and Trap” section characterized by thumb/hand graphic manipulation in each chapter, where he injects additional information and guides the reader.
However, the whole of part three has been summarized in chapter one, meaning that chapter one can be harmonized with part three. Perhaps this writer deliberately used this repetition style to ensure a long memory on the part of the reader.
Overall, this text is easily considered a masterpiece of business development. Highly recommended to all existing and aspiring entrepreneurs. This is fantastic.