When you start a new business, everybody states that you need to write a business plan. What is more common is someone jumping into business, to see how it goes.

This is very common in service-based industries. Take architecture, for example. Most new architects get into business for themselves, almost by accident.

The "Wing It" Business Startup

Meet Matthew. He has been working as an intern architect with his company for 7 years. Six months ago, he got his formal architect designation and is now a fully registered architect. His company gave him a raise, but he feels limited there.

A friend of a friend calls him up and asks if Matthew can do a small project. It’s a facelift to a strip mall, and he can do the job on the side, during some evenings. It doesn’t interfere with his daytime activities, and the project is not the kind that his company takes, so Matthew sees no problem. He takes it on and the project goes really well, for his first solo venture.

His client is very impressed. Is Matthew available to take on another new project, the development of a new strip mall? The fee isn’t high, but Matthew needs the experience, so that’s ok. After thinking it over for a couple of days, he gives his notice to his boss, and takes on the new project.

Turns out that the project is a little more than he bargained for. After a few battles with the city, Matthew prevails and the project is successfully planned, drawn and ready for construction.

Though he now has the continued responsibility of contract administration through the construction phase, his time is mostly his own again. His fees are less, so Matthew now needs to find more work.

Welcome to Self-Employment

Like Matthew, many entrepreneurs take that step into their own business without thinking too much about planning or how the future is going to look. Life is a risk, so why not try it? After all, you tell yourself, I can always get another job if this doesn’t work out.

In many service-based industries, there are many stories like Matthew’s. People get into business because they think they can do things better than the boss. They don’t realize that running a business that provides a service is miles different from just providing the service.

People get into business with the best of intentions. Good intentions do not automatically lead to productivity. You can be incredibly well-intended, but if your business is not structured correctly, the chances of failure become very high. Productivity is a function of design and structure.

How do you increase the chances of success? By planning your business. 90% of the effective completion of any project lies in thinking it through. The other 10% occurs through the implementation itself.

This is where a business plan comes in. Most people do a business plan because it’s a requirement of a lender, or an investor. Business plans for most people are marketing documents for raising money.

What if you used a business plan as a blueprint for yourself? Many people state that they do not have the time to write out a business plan. I you don’t have the time to think through the growth of your business, then you clearly won’t have the time to redo it after making the mistakes you will certainly make, because you didn’t think things through.

Others would assert that they just don’t know how to write one that is useful. If you Google business plans, there are no shortage of templates out there. Which is the one to pick?

When I was doing my MBA, we were given a template of what I consider probably the best business plan outline I’ve seen. This plan provides what a bank or other lender would need. It also goes further, to spur questions that people need to ask themselves, so that they really think through the planning process completely.

I’m going to outline this planning process. One thing you know is that life will have its ups and downs, its twists and turns. The better prepared you are, the easier it will be to adapt to the changes life brings.
 

Part 1