Spinelli Stephen - Business plans that work a guide for small business

BUSINESS PLANS THAT WORK

A Guide for Small Business

BUSINESS PLANS THAT WORK

A Guide for Small Business

Jeffry A. Timmons

Andrew Zacharakis

Stephen Spinelli

McGraw-Hill

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Copyright 2004 by Jeffry A. Timmons; Andrew Zacharakis, and Stephen Spinelli. All rights reserved. Except as permitted under the United States Copyright Act of 1976, no part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written permission of the publisher.

ISBN: 978-0-071-43604-5
MHID: 0-07-143604-9

The material in this eBook also appears in the print version of this title: ISBN 978-0-071-41287-2, MHID 0-07-141287-5.

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Contents

Preface

We have worked with hundreds of entrepreneurs over the years (over 75 years of combined experience) in varying capacities: as practicing entrepreneurs, professional equity investors, advisers, and board directors. Through our efforts we have come to appreciate the value of business planning. Those who argue that the business plan is time-consuming and is obsolete the moment it is complete are missing the point. The business plan isnt just a tool to raise capital; it is a process that helps entrepreneurs gain deep knowledge about their ideas. The discipline that the planning process provides helps you assess the nature of the opportunity and explore ways to execute that opportunity. Will your business model change once you start the business? Absolutely. In fact, going through the business planning process will result in modifications even before you launch the business. That doesnt mean that business planning is a wasted exercise. We guarantee that the act of business planning will save you countless hours and sums of money in false starts simply because it will help you anticipate the resources required and the pitfalls that may arise. Even though business planning cant help you anticipate every potential problem, the deep learning will more than offset the costs of writing the plan.

Book Design

This book will illustrate a proven and innovative approach to writing a business plan. Each chapter will introduce different components of the planning process. Also, each chapter will illustrate the concepts by highlighting FireFly Toys, an actual company in the launch stage. The key feature of this section is the comments in the margins that point out various aspects of the plan that are good and others that need work. As you read through the book, you will become familiar not only with the process but also with FireFly Toys. A word of caution: Your business plan will vary from the FireFly plan in many areas. Each company has a unique story, and while there is a consistent core to the business plan process, your process will vary in terms of emphasis and the length of the various components. To drive this point home and provide another example, has a dehydrated plan for a different type of company in a different type of industry that might be sent to a potential investor.

Fossa Industries is a medical device company currently in the U.S. Food and Drug Administration (FDA) approval phase. The company has been successful in raising capital during a very difficult period (after the dot-com bomb). shows Powerpoint slides that are used when pitching to investors. As with the FireFly example, we use marginal comments to point out various features of the Fossa plan.

As you begin this exciting adventure in the world of entrepreneurship or as you take a second look at your current business, we hope you look at this as a process. The final product, a completed business plan, is one step in the journey. There are many more steps, and many more business plans will be completed; the important thing to take away from this book is the idea that the business plan process is one of learning. Going through the process helps you anticipate the future and thereby save time and money. This is a high-yield investment in your future success. Internalize this way of thinking and you will move beyond the failure rule and hit the thresholds that lead to ultimate success and return.

We hope you will find this book useful as you embark on your journey. Good luck.

E ntrepreneurship runs deep in the American psyche. Many of todays heroes are celebrated for their entrepreneurial achievements. Bill Gates, Steven Jobs, Sam Walton, and Arthur Blank, among others, have created businesses that are household names (Microsoft, Apple Computer, Wal-Mart, and Home Depot). Whereas people entering the workforce in the 1960s and 1970s sought larger corporations and job security, people entering the workforce today are seeking younger, entrepreneurial firms or launching their own ventures. If America has learned anything in the last 20 years, it is that job security is a myth. To succeed, people need to be creative in designing their careers. That means seeking jobs that build your skill set and position you to start your own business at some future point. For those of you reading this book, the time may be now. You are not alone in your entrepreneurial dreams. Twenty-two million of your fellow Americans are in the process of launching a business or own a business less than four years old. Ultimately, the most rewarding and satisfying careers are those which are created for oneself; create a company rather than a job.