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The Business Model:
What Is the Concept for My Business?

Deciding to go into business for yourself is a single decision. But how you’re going to get into business involves lots of interrelated decisions that need to be made in a logical order.
For this, you need a business plan.
This first chapter covers the first section of the business plan.

This is where the entrepreneur explains the overall concept for the new business.
The chapter will answer the following questions:
■ What Does It Mean to Be “in Business”?
■ What Is My Business Idea?
■ Do I Need a Partner?
■ What Will My Business Mean Legally?
■ How Do I Get Started ?

Learning Objectives On completion of this chapter, you should be able to:
1 Discuss the definition and role of “small business.”
2 Assess your own potential as an entrepreneur.
3 Identify at least four advantages and/or disadvantages of an entrepreneurial lifestyle.
4 Define a new business in terms of what it will sell and to whom.
5 Differentiate between “location” and “site.”
6 Compare at least three legal forms of business.
7 Prepare the Concept and Summary portions of a business plan.

A business model is the pattern of activities that a company uses to make profit.
For example, you could be in the car rental business, renting out cars to drivers who pay by the day and who are responsible for buying their own gas.

Or, you could require that customers pay an annual membership fee and members pay by the hour, with gas and insurance included in the rate.
In both cases you’re in the car rental business, but these are different business models.
A fast-food take-out restaurant is a different business model from a fullservice sit-down restaurant.

And chances are, the business model you will be using has already been proven successful by someone else, so be prepared to copy successful business concepts from others.
Being in business, however, is more than just copying the successful pattern of a specific business. It also means applying proven principles of business from a wide variety of firms. So, like most textbooks, this one uses examples from a wide variety of companies.

For many students, this is a problem, because they only want to read about a single successful model from a single industry.

For example, if you are studying aviation management, you want to see examples of airlines. If you are thinking about starting a restaurant, you really only want restaurant examples; you don’t want to read about a sound equipment rental firm or jewellery store.

But this prejudice comes from failing to recognize a simple truth: Business is business.
Clearly there are some differences between the business models of independent film producers and of plumbing companies.

But they both make money by applying the same principles of business.
Many talented artists and skilled technicians profess little interest in business.
They make the critical mistake of believing that financial success will automatically come as the result of their skills or talents.

But ask yourself:
How many great artists have died penniless ?
Know of any third-rate musicians who nevertheless make lots of money ?
Skill and talent are only a small part of the route to financial success.

The rest is business.
Once you see yourself as a businessperson, every time you fill your gas tank, go to the bank, or eat in a restaurant, you’ll be learning a little more about how to make money in your own field. You’ll truly be in business.

Small Business and Entrepreneurship
This text is about starting a small business, and most of us hold a pretty clear picture in our minds of what a small business is.
But most of us are wrong; at least according to the experts.

Ask yourself: How many employees can a business have and still be considered small ? There is no standard definition of business size.
However, many of the academics and researchers who study these matters tend to define a small business as an independent company having fewer than 500 employees,
sometimes more.

1 Now that’s a lot bigger than most of us picture small businesses to be, but there is some logic behind this definition.

Strategically, how you plan and run a business of 1 person—or 3 people or 40 people—is not terribly different from the strategy used in firms of up to 500 people.
The lesson here is that organizing and running a business of any size is a complex activity that takes thought and planning.

Realistically, over 90 percent of the small businesses in Canada have fewer than five employees.
2 This is a category of businesses that many researchers would call micro-enterprise: operations, often family-based firms, which typically have just one or two people.

And what about the one-person business ?
Self-employment is a term used to describe individuals who work on their own, often out of their homes, and often on a contract basis for various companies. Some of these people may not be classified as business “owners,” but rather as “contract employees.”

In fact, Canada Revenue Agency (CRA) treats many of these people as employees even when they consider themselves to be in their own business.

This raises the question:
What is a business ?
Generally, a business must have some value of its own, apart from its owner.
Ask yourself: Could I sell the business ?
If you’re a one-person plumbing company, the answer is probably yes, in that selling the business would mean selling the truck, the tools, the company name, and maybe some contracts. If you’re a freelance speechwriter, however, the answer is probably no.

In this case, the entire existence of the business would depend on you, the owner, without whom there would be nothing to sell.
Ask yourself: Does this mean that freelancers who earn their living by selling their personal services are not “in business” and do not need a business plan ?
It does not !
Even though lenders tend not to treat freelancers as businesses,
they still have to plan and carry out most of the same business activities as those who have a business that they could sell.

Freelancers, to be successful, should still use a business plan.
Although freelancers may not always be considered business owners, they do practise entrepreneurship.

They risk their time, labour, and money in order to make profit.
This is the essence of entrepreneurship.
So even though not all entrepreneurs are official business owners, certainly all business owners are entrepreneurs.

Ask yourself: Am I clear on the definitions of entrepreneurship, small business, self-employment, freelance ?
Despite the fact that the above terms have precise meanings, they will be used interchangeably in many instances in this text.

That’s because all entrepreneurs—small business owners, freelancers, and self-employed people—need business plans.
And the business plan is what the first part of this text is all about.
This first component of the business plan demonstrates that you have given some thought as to whether you are the right kind of person to start a business.

It demonstrates that you have the right training and experience and that you know what you are getting into. It also clearly states the nature of your business, the location, and the legal set-up, describing any partner or investor relationships.

Entrepreneurship is a great equalizer. It has long been a way to overcome barriers against ethnicity, age, and gender.
True, some ethnic and cultural groups are more likely to have a tradition of entrepreneurship, but this is usually because of historical discrimination barring them from trades or professions in many parts of the world.

In Canada, for some Aboriginal groups who traditionally lacked access to business capital, entrepreneurship has become a route to self-sufficiency.
For the young in Canada, entrepreneurship is now highly encouraged, with many government support programs and non-profit organizations available to assist.

And the growth in entrepreneurship by women in the past few years has been explosive. Forty-seven percent of Canadian businesses are now at least partly owned by women, who have access to borrowing money equivalent to that of their male counterparts.

3 The Entrepreneurial Personality Ask yourself:

What kind of personalities do successful entrepreneurs have ?
Do you think of terms like aggressive, outgoing, intelligent, dedicated, self-motivated, ruthless, single-minded, charismatic, scheming, and so on ?
This is how many of us picture entrepreneurs. But take a moment and think about some real-life entrepreneurs you may have met, not the ideal entrepreneurs of popular culture.

Think of someone who is, perhaps, the owner of the dry cleaner near your home, the owner of the drugstore where you work part-time, or the owner of the garage that fixes your car.

These are people who make a living by running their own business; in other words, successful entrepreneurs who, for the most part, are not the perfect heroes of modern mythology. In fact, they tend to be pretty ordinary people: some of them kind, some shy, some lazy—not the movie image of the successful entrepreneur.

Complete the “trait test” in Figure 1.1 before reading any further.
Many small business texts start out with a self-assessment test of some sort, something to see if you’re the right kind of person to run your own business.

So, what characteristics are these entrepreneurial tests typically looking for ?
Most of these tests are looking for the same characteristics that are popularly believed to be true of entrepreneurs. They are typically based on some form of research, but for the most part, this research lacks validity.

In fact, much of it is “ junk research ”—looking at characteristics of people who are already successful business owners, instead of looking at the traits that entrepreneurs had before they became successful business owners.

There are a few rigorous studies of the traits that help people to become successful entrepreneurs, and the results of these show that most people have the potential to start and run a business.

Trait Test 4 Score each of the following statements according to how true it is of you.
Calculate a total at the bottom.
0 = never true of you
1 = occasionally true of you
2 = usually true of you
3 = always true of you

I am confident in my ability to influence others. _______
I work harder than most others I know. _______
I have a clear picture of my future. _______
I spend more time attending to responsibilities than most people do. _______
I have specific long-term goals. _______
I spend time each week planning my future. _______
Compared to most people, I take work or school seriously. _______
I do a thorough job in completing my tasks. _______
The steps to success are obvious to me. _______
I believe in my own ability to succeed. _______
I work more hours per day than the average person. _______
I see myself as controlling my own destiny. _______
Compared to others, I am more likely to exercise self-control. _______
I make the major decisions that affect my life. _______

I know what I want to achieve. _______ TOTAL _______

Self-Analysis Generally, but not universally, successful entrepreneurs tend to be a little more hard-working than the rest of the population; they tend to be more goal-oriented; and they tend to have more confidence in their own ability to influence their futures.

These are the characteristics that the self-scored test above is looking for.
Get Help 1.1 If you are unsure about your own suitability to run a business, arrange an interview with an employment or career counsellor through your community college or check with your local Service Canada office (1-800-OCanada) for any programs near you.

Scores Above 38 well above average
34–38 above average
26–34 average
22–26 below average
Below 22 well below average

If you didn’t get the score you wanted, don’t worry about it.
Remember, with selfassessment tests like this there are always questions of validity and reliability—if you were to have something different for breakfast tomorrow and were to rewrite the test, you might get a different score.

There is little evidence that these tests can actually predict entrepreneurial accomplishment. Besides, the real value in tests like the one above is that they make you ask yourself about yourself.

Ask yourself: Am I the kind of person who can start and run a business ?
There is little doubt that a certain combination of personality, skills, and desire produces
the ideal entrepreneur.
But some of us have no inclination to run our own business, regardless of our talents in these areas. Circumstances, however, can make people believe that self-employment,

though not their first choice, is the only option available to them:
the graduate with a diploma but no job prospects, the aging “downsized” middle manager, the new immigrant with no Canadian work history, the mature homemaker who has been out of the workforce for many years and can’t find employment.

These people are often
Beautiful Woman Store

the big advantages of owning your own firm is that it can provide employment for family members. As children mature, the tendency to socialize less and less with parents can be offset by the closeness of working together.

Ask yourself: How will owning my own business affect my relationships with my children ?
Employee vs. Entrepreneur There is lots of good news about being in business for yourself, including the money. Small businesses that are successful can provide their owners with incomes far above the average for employed people.

The statistics don’t always reflect this clearly, but still show entrepreneurs as making somewhat more than the average.

12 The statistics, however, can be misleading.

When small-business incomes are reported, they tend to include the failing companies
(with little or no personal income for the owner) and they do not include the underground economy (the billions of dollars in unreported income that is funneled through small companies each year).

13 When working for an employer, there are many factors that limit the employee’s income, including what society thinks is fair pay for a particular job and the labour market itself.

Ask yourself: Why would an employer pay any more for help than is necessary ?
But when working for yourself, you can take home as much money as the business can produce. The sky’s the limit.

Every one of Canada’s billionaires got that way by owning businesses, not by working for the government or big companies. If becoming wealthy is your goal in life, your single best chance for it is through entrepreneurship.

For a number of years, educators and employers in Canada have been co-operating to help foster employability skills in today’s graduates.
These include skills in:

■ oral and written communications;
■ mathematics;
■ time management;
■ teamwork; and
■ computer literacy.

Certainly, all of the above could be advantageous, not just in employees, but to the small business owner personally. In addition, however, the entrepreneur needs some skills in the following areas:
■ Financial planning.
A huge number of potentially profitable firms go bankrupt each year simply because of the entrepreneur’s inability to understand and plan cash flow.
■ Sales/negotiation.

The entire profit-making process starts with convincing someone to buy your product or service. Profit can also depend on an entrepreneur’s ability to make deals with suppliers, regulators, and even employees.
■ People management.
While not necessarily important at start-up, the eventual growth of a business is going to depend on employees, which the entrepreneur will have to recruit, train, and motivate. These are entrepreneurial skills.

To be a successful entrepreneur, however, you don’t have to do it all on your own! While employees may be judged on their personal skills, entrepreneurs are not.
Entrepreneurs are judged solely on their ability to make profit.

An entrepreneur who lacks financial skills can rely on an accountant for help in this area. A poor negotiator can partner up with a strong negotiator. It is also possible to start a business by buying a franchise where all of the management systems and training are provided.

So, the real skill of the successful entrepreneur becomes the ability to assess himself
or herself and seek help in any weak areas. Ask yourself:
What entrepreneurial skills do I have ?
Which do I need help with ?

Head Start Exercise 1.1 Prepare a brief résumé of your education and work experience.
Then, in three or four short sentences, explain why a career as an entrepreneur would be appropriate for you (1 1/4 page maximum).

Causes of Demand Every change produces a business opportunity, sometimes called a gap. The kind of change doesn’t matter: political, economic, social, cultural, environmental, technological.... A growth in the number of school-aged children means a need for more photographers taking class and graduation pictures.

An increase in purchasing via the internet means a need for more webpage designers.
More online magazines means a need for more freelance journalists.
Why is now a good time to start a business of the sort you are proposing ?

This is a natural question from lenders or prospective investors when approached by someone starting a business. The best way to answer this question is by pointing out some sort of change that has given rise to this business opportunity.

For example:
“There has recently been a big increase in home schooling, so I am starting an online service to sell teaching aids to parents who teach their kids at home.” Ask yourself:
What was the change that produced an opportunity for my favourite band ?
My favourite restaurant ? Specialization,

The highest-paid medical doctors are the superspecialists—those who treat only a certain organ or fight a particular group of diseases.
When something is wrong with your heart, you want only a cardiologist.

Even though a family physician may be well enough trained to diagnose and treat you,
if it’s your heart you probably want to see a cardiologist.
If you are accused of tax evasion, the lawyer who handled your will or real estate transaction may be perfectly competent to handle the problem.

But you would rather have a specialized tax lawyer, even though you know it will cost you more. It works pretty much the same for other small businesses:
Generally, those that specialize make the most money.

14 This isn’t always an easy concept to accept. It might seem that the greater the variety of goods or services you sell, the more opportunity you will have to make money.
But that’s wrong.

An electronics store that specializes in audio equipment does not have the overhead of a store that has to carry TVs, DVDs, cameras, computers, smartphones, burglar alarms, and so on. And the true audiophile shopping for those special speakers wants to buy them (and will willingly pay more) from a specialist.

There is also the issue of efficiency from specialization. If you’re a freelance writer who specializes in speech writing, you can generate speeches more quickly and of better quality than the writer who does a magazine article one day, an instruction manual the next, and a promotional pamphlet the day after.

Each of these writing styles has a time-consuming learning curve associated with it.
Furthermore, you, as the specialist, have the advantage of being perceived as a monopoly: the right one (the only one) to deal with.

Head Start Exercise 1.2 Make some notes explaining how you will make money by specializing in particular products or services (1/4 page maximum).
For small businesses, it is generally more profitable to specialize in a narrow range of products or services. But there is another way that a business can and should specialize: the types of customers that it aims to capture.

This is called targeting and, generally, small businesses that target narrow groups of customers are more profitable than businesses that tend to see themselves as
being for everyone.

Targeting This is often a difficult concept for new business owners to accept, since the narrower the target that a business pursues, the fewer the potential customers that are available. Let’s say you own a CD store and you have never met anyone who didn’t like music.
So your store could be for “everyone.

However, if your store targets a particular age group—say, 18 to 35—there will be fewer potential customers than if you target “everyone.” Nevertheless, your business is likely to make more profit by going after this smaller group.

And if your business narrows its focus to people in a particular geographic area—say, uptown neighbourhoods—there will be even fewer potential customers, but your business will likely make even more money.

And if your business narrows its focus even more—say, to people in a particular economic group—it will likely make even more profit. It may seem strange since each narrowing of the target group leaves fewer potential customers, but it’s true !

You’ll make more profit. If your store is targeting people who are all the same age, all live in the same area, and all have the same incomes, the same education, the same attitudes, you can be fairly sure they will all listen to basically the same music.
A business such as this can carry everything that its customers want without having the big expensive inventory needed to satisfy “everyone.”
In addition, advertising to this target group will be a lot cheaper than advertising to everyone, (because they all live in the same small area).
This saves you money, allowing for more profit.

Head Start Exercise 1.3 Make a list of particular customer groups you could target and note why each might be a good idea (1/4 page maximum). Location Where you locate your business helps define your business concept or model.

Ask yourself: How important is the location to the success of my business ?
Is there a difference between location and site ?
Where you put the business, in a general sense, is what we mean by location: a certain city, a certain region, or a certain neighbourhood.

When we talk about site, we are being much more precise: a particular corner, an exact address, or even a specific part of a building.
For example, you may decide to locate your business in downtown Halifax (a neighbourhood) but the site of your business might be the Halifax Shopping Centre, the first store on the right, inside the main doors from Mumford Street (a particular unit.)

For retail and consumer services businesses, site can be a critical factor to the success of the business. These are businesses where the customer comes to you.

So, it is necessary to get a site that is accessible to your kind of customer, or even better, already has high traffic of your kind of customer. For manufacturing or wholesale firms, site tends to be less important, but location is often critical.

For example, if you plan on wholesaling precision bearings, it may be important that you are located in Southern Ontario, where most of your customers (machinery manufacturers) and most of your suppliers (metal cutting firms) will be found.

But it won’t make much difference whether your site is in downtown Hamilton or suburban Mississauga since both have access to local transportation.
For some companies, the site of the business is the owner’s car, or a cell phone, or the back part of the basement. These are “home-based” businesses.

You are most likely to have a home-based business when you either don’t meet the customer face-to-face (e.g., mailorder or online businesses), or when meetings usually take place at the customer’s premises (you go to them). The number of home-based full- and part-time businesses is growing rapidly as a result of new technologies and the increased contracting-out of work.

In fact, you may be using this text as part of an online course where the instructor is working from his or her home. The idea of working out of your home may be very appealing to you (work all day in your pyjamas and be able to fix lunch for the kids).

However, the decision to work from home should always be based on what you’re selling and to whom you’re selling it. If your business is booking DJs for small local clubs, working out of your basement is great since your customers (the club owners) may believe that your low overhead will mean lower prices for them.

But if you want to be a talent agent for high-priced models and actors, then producers will expect you to have an office in the business or arts district of the city: It’s an issue of credibility. At this point in the business plan, you are making a “working decision” about where to run your business.

Later, in Section 2 of the business plan (Chapter 2), you will do a more detailed analysis of your location and site, which may lead you to revisit this decision.
In practice, however, most entrepreneurs don’t do a detailed analysis first and then open their firms where data shows the greatest likelihood of success.

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Instead, they open up in the location where they already live, have families, go to school, and know their way around. They are likely to pick sites that they are familiar with or where they have a connection with the landlord.

If this is the case for you, you must stay aware of the fact that your choice of location should be influencing your choices of what you are selling and to whom you are selling it. Head Start Exercise 1.4 Write a brief description of the location for your proposed business and note one or two advantages of this selection (1/4 page maximum).

Defining the Business
The definition of your business is as statement of what you’re selling and to whom you’re selling. Let’s say you have training in graphic arts and you worked for a sign
manufacturing company.

Perhaps, at the same time, there is an opportunity in the sign industry based on
recent technological changes allowing for inexpensive computer-based design
and colour printing.
And let’s say there is a store for rent on the main street of your hometown and you see it as an opportunity to start a “quick-sign” store.

The two specialization questions you must ask yourself are
■ What am I selling ?
■ To whom am I selling ?
The easy answer is “ I am selling signs to anybody who wants to buy them. “ Unfortunately, this is also the wrong answer.

If Shell Oil wants to buy 11 000 high-tech illuminated signs for its gas stations in Europe and North Africa, your small business obviously cannot supply them.

In fact, the business you can afford to set up involves a single graphics computer with one printer that can print only on fibreboard, plastic, or paper surfaces to a maximum size of one square metre (i.e., no large illuminated signs like Shell needs).

You are already specialized by the limitations of your company.
So what you expect to be selling can now be defined as small non-illuminated signs.

Defining what you’re selling also helps to define who the potential customers will be. Who is able and likely to buy the type of signs you are selling ?
Independent gas stations offering tune-up specials, real estate agents needing
“for-sale” signs, pizza parlours pushing two-for-one deals, car dealers with finance rate discounts—these are all small retail and service businesses.

Or Amazon @

Logic tells us that small companies such as these are not going to chase halfway across the country to buy signs; they will shop in their own geographic area.
So maybe your market now becomes small retail and service businesses within the town (or neighbourhood) where you are located.

We are getting closer to a definition of the business.
But remember, writing the business plan is really a process of rewriting, and the thing we are going to rewrite the most is the definition of the business.
So, defining the business is often a process of redefining the business, many times.

Therefore, our current definition is only a working definition, and we can expect it to be modified and refined when we look into issues of market research, sales strategy, location, competition, and so on.

Head Start Exercise 1.5 Take a few minutes right now and write out the first few lines of the plan for your business idea. Briefly indicate what you will be selling and to whom you plan on selling it (1/8 page maximum).

The “business opportunities” column of the newspaper lists many people looking
for business partners. Typically, these are people with ideas looking for partners with money.
There are few legitimate ads from people with lots of cash but fresh out of ideas.
People can and do find partners, but it’s usually from less formal sources than newspapers.

Relatives, fellow employees, classmates, friends...
these are the people one is most likely to partner up with in a new business. In many cases, the partnership is formed before the concept for the business is clear and before anyone has asked whether they really need a partner.

Ask yourself: Do I really need a partner? Why ?
There are lots of legitimate reasons for having a partner: sharing the risk, increasing
financial resources, personality reasons, reasons of expertise, and so on, but the fact
that someone is your cousin or long-time friend is not, by itself, reason enough to include them in the business.

You should not form partnerships because of past obligations, but rather for mutual future benefit. Partner Personalities You may well need a partner—sometimes more than one.

The question then becomes, What personality traits and skills do you want in your partners to complement your own personality and skills? Ideally, your weaknesses will be their strengths and vice versa. Also keep in mind the extraordinary number of hours that you will be working with your partners.

At the very least, you want people you will get along with. Don’t forget that starting a new business is an emotional undertaking and your relationship with any partner will be emotionally charged—that means conflict, even fighting.

But the purpose of a partnership is to spend your time making profit, not war.
Partnership conflict is inevitable and not totally counterproductive. It can often help to look
at problems from more than one perspective, but protracted fights among partners are just bad for business.

Ask yourself: Am I likely to fight longer with someone who is just like me, or with someone who is my opposite ?
As with most human conflicts, the battle is likely to be over quickly if one of the partners is dominant. Forget about trying to find a partner with whom you are perfectly evenly matched.

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Having one of the partners dominate could well be to the advantage of both.
And when partners cannot resolve conflict themselves, it is worthwhile to seek the
help of a professional mediator.

15 If mediation is not successful, partners can then turn to arbitration so that the conflict can be settled and they can get on with making some money.

Over the past few years there has been tremendous growth in Alternative Dispute Resolution (ADR), and professionally designated mediators,
(Chartered Mediator—C. Med.) and arbitrators (Chartered Arbitrator—C. Arb.),
are easy to find.

Partnership Agreements We know that it is important to reduce conflict between partners, and one of the most effective ways to do this is with a detailed partnership agreement.
16 Ask yourself: What kinds of issues are likely to be covered in a partnership agreement? The basic questions to be answered by a partnership agreement are:

■ Who puts in how much of the capital ?
■ Who gets what portion of any profit ?
■ Who has authority over which decisions ?
■ What are the responsibilities of each partner ?
■ How can disputes among the partners be settled ?
■ How can the partnership be changed ?
■ How can the partnership be ended?

These issues seem pretty simple, but simple issues become enormously complex if they are not clarified at the beginning of the relationship.

What if you were to start a partnership with your friend? You agree that the friend will invest 60 percent of the capital to start the business and he will have 60 percent ownership.
Or go to Amazon @

The Business Plan

Most new businesses are started without the owner ever having written a formal business plan. But then, most new businesses fail within a year or two. Pretty much every human activity is more likely to have a successful outcome if it is planned. This includes a chess game, an athletic contest, a vacation, asking someone for a date, and so on. The plan isn’t always written out, but it does exist.

A business, however, is much more complex than a chess game or a party.
No reasonable person would attempt to build a house or a vehicle or anything else that complicated without a written plan. So it only makes sense to use a written plan in building a business. Having a written business plan will improve your chances of survival.

17 Ask yourself: What other reasons might I have for needing a business plan ?
Formal business lenders and investors require written business plans.

If you want to borrow money from a bank or sell part of a business to investors (other than your grandparents), you almost always have to have a written business plan.

There are many uses and variations in business plans, the details of which are covered in Chapter 12. But for most start-up businesses, all the necessary components of the basic business plan are covered in Chapters 1 – 5. Each of these chapters.

(including this one) covers one of the five components of the basic business plan:
■ the business model
■ feasibility
■ marketing
■ operations
■ finances

At the end of each of these chapters, there is an outline for that section of the business plan You will have already completed much of this work if you have been using the Get Started exercises.

On the principle that it is easier to fix up a bad plan than it is to write a great plan from scratch, start by writing something that is less than perfect—or even fairly bad. Just get something down on paper or into a computer. It can always be fixed up later. Remember, most of the work of writing a business plan is in rewriting.

Section 1 of the plan lays the groundwork for Section 2, which must be completed before Section 3, and so on. But as the decisions for each section are made, they sometimes require you to go back and rewrite earlier parts of the plan.

Notice that the outline for Section 1 of the business plan starts with a summary, often called an executive summary.

Beautiful Young Ladies Store div dir="ltr" style="line-height: 1.38; margin-bottom: 0pt; margin-top: 0pt;"> If you are using the plan for your own purposes and it is not intended for other readers, then the summary is really not necessary. For readers other than the entrepreneur(s), the summary is a valuable overview of what the plan is about.

If you are using one, even though it is at the beginning of the plan, it will be written after the rest of the plan is completed.
If you want to be in business for yourself, the first step must be taken by you, the entrepreneur. You must start writing the business plan.

There is little point in hiring a highpriced consultant to write a plan that is not
made up of your ideas; you just won’t follow it. That doesn’t mean you can’t
get help for the process.

Throughout this text there are tips on who and what can help you in preparing the plan. And if writing is just not your strength, there are lots of professional writers willing to proofread for you and fix up your grammar and spelling.

But the ideas must be yours, because your real purpose in writing a business plan is not just to end up with the document.

Rather, it is the process that’s important.
By having to prepare each element of the business plan, you are forced to think through all of the critical decisions involved in starting a business in a logical order—an order that will let you see contradictions and areas where your plan does not make sense.

Writing it down forces you to make a better plan.
Ask yourself: What will be the most difficult part of writing a business plan ?
What will be the easiest ?
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The biggest problem with writing a business plan is the same problem encountered in any type of writing: overcoming procrastination.
It is amazing how creative people can be in finding critical things to do instead of writing the plan: looking at locations, calling suppliers, shopping the competition—these are the easy parts. But the writing has to be done, so just do it! Take the first step and start writing.


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