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Business Plans – The Solution

We continue our discussion of what constitutes a good business plan. If you missed the first installment in this series you can find it here: http://pgentile.com/?p=47 . It is suggested that to get the most out of this series, you should read these short episodes in the order in which they were written. That way you’ll get a real feel for the flow of a business plan and, for an added bonus, the later installments will make more sense; each installment builds on the articles that came before it.8712854918_841b19332d_m

We’ve already discussed the first step – what is the problem or need you have identified? Hopefully you have been able to articulate not only what the problem is but also able to back up your statement with some evidence. Remember, “articulate” or “back up” means “put it in writing”. All of these steps call for the business owner and executive director to write out their response to each of these prompts during the business plan process. The writing process forces you, the owner, to describe the problem you see as well as your solution to that problem; the process is a tremendous asset to you in crystallizing the core of your business. Like the spokes on a bicycle wheel, every other aspect of the business plan will flow from these two core points (the hubs): what is the problem and what is your solution? Without those hubs your business wheel will likely collapse with the slightest pressure.

What is the Solution?

7369580478_92ccf6bfbd_mUp until now we’ve been focusing on the problems, needs and gaps in our society that need fixing. That’s key because if people don’t see a problem, need or gap they are unlikely to buy your product or services on a sustainable basis. Now that you’ve identified the problem and educated others that the problem exists and needs fixing, it is time to present them with your “fix” to the problem.

At this point you as the entrepreneur and world-changer have your opportunity to explain your solution to the problem previously identified. The floor is yours and the spotlight is on; how does your idea, your product or your service solve the problem? Be specific.

Let’s look at some examples. Suppose the need you’ve identified is a lack of artisan breads in your community and the surrounding area. People like good, homemade, fresh-baked bread and there isn’t a baker filling that need in your area. You already enjoy baking fresh bread for your family and a few friends and you’ve gotten rave reviews. So you think … maybe I can make a living doing this? Your solution is to bake breads and other home-cooked delicacies and sell them at farmers markets, festivals and through word of mouth.

Here are two other examples of problems identified and the proposed solutions. Everyone knows about the climate change and environmental problems facing our planet. However, there is also an ever-increasing demand for energy. How can we create a sustainable, reliable energy source while helping to reduce our carbon footprint? Two different solutions are presented for the same problem. First, one company decides to open a used vegetable oil cleaning and processing business. The company would take used vegetable oil from restaurants, that would otherwise end up in a landfill, and process it to be used as a biofuel. The biofuel could be used in lieu of diesel fuel for cars and trucks among other things. 11221786476_dabe99a4bf_m

Second, another company opts to take leftover organic waste (e.g. food scraps) from restaurants and grocery stores that are headed for landfills and use it instead at their facility; at the facility, the organic material is mixed with bacteria which eats the material producing methane gas (which is used to fuel electric generation plants) and the solid leftovers are used as agricultural fertilizer.

The solution does not have to be elaborate or technology driven; the simpler the better. The solution just has to be your answer for the problem you’re addressing.

Business Plans – What’s the Problem?

Let’s talk about business plans.

I know, I know; that’s about as exciting as watching paint dry. While that may seem to be true perhaps what is really driving that reaction is fear. When we don’t understand something we tend to be afraid of it and when we are afraid of something we avoid it like the plague. Right? The idea of writing a business plan might be so uncomfortable due in large part because when we think “business plan” we think of a 30-page document filled with charts, spreadsheets, accountants, lawyers and costing lots of money. But it doesn’t have to be that way. So let’s begin to demystify “business plans”; over the next few weeks I’ll be breaking down the info that goes into a business plan. Perhaps then it won’t seem so daunting a task and you’ll see the benefits of putting your plan down on paper. 16443389416_1f0908dc70_m

What Is It?

When you get right down to it, a business plan is nothing more than answering a few questions in some key areas. Once you answer those questions then you can flesh out your answers and provide some backup to your assumptions. You can find spreadsheets for the number crunching at a variety of places on the web. The length and detail of your plan will depend on who is going to see it – a bank, family, or for your eyes only. During the next few weeks we will just be discussing a basic template to get you started. What we will be discussing applies equally to a for profit and a non-profit business! All businesses need a plan!

Why?

Anyone who is in business already or who is considering launching their business needs a business plan. If they don’t, they either won’t be in business for very long or they won’t reach their full potential in business. Basically, a business plan is a critical tool for the business owner because it demands that the owner ask herself some poignant questions about her business and rationally assess the answers to those questions. Without such a process the business will wander aimlessly and likely crash and burn leaving the business owner not only demoralized but also likely owing banks, friends or family significant amounts of money. You’re not launching a business or a non-profit in order to fail. You want to succeed and succeed in a big way! So let’s give yourself the best chance at success by doing a little bit of planning in the beginning. Let’s begin.15402350046_b70d0dc9bf_m

What’s The Problem?

Today we start with the most basic question – what is the problem you are trying to solve? You’ve spent time in and around your neighborhood and have noticed a few things that are lacking. There isn’t a decent coffee shop anywhere close to you. There is no place to get a decent sandwich at a reasonable price. There’s no place to have some family fun. Where is one to get a decent cigar in town?

Perhaps you’ve been searching in the markets for a particular item to meet a particular need but have not been able to find it. You hear your friends talking about a particular problem but there isn’t anything that exists to solve the situation. You need a gizmo to make life a little bit easier.

Whatever the problem you see, whatever the desire that is not being satisfied, whatever the need that is not being met – there is an opportunity for you to provide the solution. If there is no problem, then perhaps it is best to categorize your “business” idea as a “hobby”. Don’t misunderstand me, there is nothing wrong with hobbies but hobbies generally satisfy your own needs and not the needs, desires or problems of others around you.

So, the first part of any business plan begins with articulating a problem that needs solving or a need that requires a solution. Take some time to put down on paper the problem as you see it. Give it as much detail as possible. You should be able to delineate the issue within two or three paragraphs. Once you are able to describe in detail the problem then, and only then, can you articulate your unique solution.