It is surprising how many businesses get started without anything more than the thought that the owner wanted to be their own boss.  Did you know that "if you fail to plan, you are planning to fail"?   Procrastination is actually decision not to do.  While a dream of independence is sufficient as a catalyst, it takes much more to lay the groundwork for long‑term success.

            It is important to realize that while the dream and a goal are essential to short and long‑term success, unless you are willing to research, plan, and project your ideas on paper first, then you are destined to make your mistakes in the real world with the corresponding loss of yours (and other's) money.

            You may have heard of the Government statistics indicating that 80% of the 500,000 businesses which start every year, fail within 5 years.  On the other hand, a study by a large SBIC (Small Business Investment Corporation) indicated that of the businesses they fund, 92% have better than a 3 to 1 growth in five years.  The difference is that the SBIC doesn't invest in new business without first receiving a Business Plan which indicates the detail of the business, its market, competition, ownership, financial projections ‑ essentially what the new business needs in invest­ment capital, how it will be used, how it will be repaid, and what will be the return on investment.  Even if your business doesn't require a large capital investment or loan ‑ shouldn't you treat your own funds with the same importance as a bank treats theirs?  It's much easier to test your assumptions on paper - getting feedback from others - than to let the cold reality of the marketplace teach you. 

            To start with your business plan: p;First ‑ do a personal financial statement ‑ it will give you an idea of the resources you have available to invest.  Next ‑ begin collecting information on similar business, and the industry or markets you are intending to enter.  Then collect a number of business plan outlines: the library and the Small Business Administration (, are good places to start. Most Community Colleges have courses on Starting a Business or How to Do a Business Plan.  In Howard County, MD, the Business Resource Center (Phone 410-313-6500) will work with you FOR FREE to develop a Plan using both the latest in computer resources and one-on-one counseling.  Take advantage of others' experiences.  (Experience comes from mistakes ‑ wisdom is taking advantage of experience ‑ preferably someone else's).  Follow through the outlines, and modify them to your situation ‑ many will make suggestions which do not apply to your specific business, but which give you ideas you may have missed.  It is better to ask a question and decide it doesn't apply than not to have asked the question.

            In all plans, it will be essential to learn the difference between income statement (profit and loss) and cash flow projections.  No business begins without some logical sense of profit, at least in the long term.  Most businesses that fail early do so because of a lack of attention to cash flow ‑ what happens to the check book.  The proper projection of cash flow will tell you how much capital you need (whether loaned or invested).  Essential to the process is a realization that bills must be paid, employees especially, even if your customers don't pay you for a month or so after the sale (or delivery) is made.  Determine the magnitude of the difference between funds actually received and expenses paid, and you will have the first essential element in knowing the amount of start‑up funds required.  The next element is logical ‑ estimate one-time expenses such as deposits, leasehold improvements, equipment purchases, professional fees, etc.  Add the two, and you have a good handle on total funds required. (Note ‑ estimate low on income and high on expenses!)

            Finally, keep doing reality checks with yourself:  every time you get an idea which looks good to increase sales or profit, make sure your business plan reflects the cost of obtaining that new business.  Nothing happens without you first investing something (time, money, or both) to accomplish your goals.  But beginning is half done, so begin NOW to plan for your future: pick up the phone and call the people at the Howard County Resource Center and get off to a great start with some free advice and find out if you can get your dreams closer to reality!

We also have templates for generic business plans - send us an email to request one:

Ralph Helwig is President of Economic Strategies, Ltd., a consulting firm established in 1983 which specializes in assisting entrepreneurs in starting and financing businesses (

Return to Article List

Franchise Consulting - free to entrepreneurs

Click Here for info on Hosting & Developing your own Website 

Return to Economic Strategies, Ltd. Home Page