As Published in the Wallowa County Chieftain, January 17, 2008
The Who’s, What’s and Why’s of a Solid Business Plan
This is the beginning of a lengthy series on business plans. Helping clients develop detailed business
plans was not supposed to be part of the WCBF program. “Back of the envelope” reality checks, yes; complete
business plans, absolutely not. Ernesto Sirolli and some of my Board members were not particularly happy to
learn that I was doing this.
However, planning was always a large part of my job in private industry, and it soon became apparent to
me here that if I didn’t help my clients do it, it simply wouldn’t get done. You see, I absolutely do not subscribe to
the philosophy of some that every business owner should prepare his or her own plan. And while I do agree with
the theory that if the owner isn’t qualified to do his own business plan, he should find a financial person to help
him, the reality is that there is almost no one who does this kind of work in Wallowa County and most of my
clients can’t afford the services of those few who do. So…helping clients with business plans has become a major
part of Business Facilitation in Wallowa County. And it has paid huge dividends in terms of both helping people
make the right decision about whether to start or expand businesses in the first place and also to sharpen the think-
ing and focus of those who do decide to proceed.
So exactly what is a business plan? Well, it is just that – a detailed, internally consistent plan, in words
and numbers, for the future development and operation of your business. It is not a vision statement. It is not a
broad statement of your philosophy. It is not a statement of your dreams for the local community, its economy,
institutions and way of life. You might write all these things down because you believe they are important, but
when you finish writing them, you will not yet have started on your business plan.
A business plan is a rigorously constructed document that helps you assess the viability of your business
idea, chart a course for future action and if it’s really good, helps you secure the financing you need to get your
idea off the ground.
Does every business need a formal plan? Actually, I don’t think so. While it wouldn’t hurt to have one, it
seems to me that for a successful, existing small business operated by the owner and for many home based busi-
nesses with no employees and no particular growth plans, a formal plan isn’t really necessary. There does need to
be some up-front “back of the envelope” analysis and an ongoing mental process in which the owner constantly
looks ahead and makes adjustments for new competition, changes in customer base and preferences, economic
bumps, technical advances, etc., but a formal document probably isn’t necessary.
There are, however, four common situations cases where – assuming this is something more than a hobby
and involves a significant amount of money – I believe it is foolish to proceed without a formal plan. These in-
clude starting a new business, buying an existing business, expanding a business and any case that involves out-
side financing.
Yes, there are people who don’t have the patience for the planning process, even if someone is going to
do the technical work for them. They will charge ahead based on intuition and using resources they can tap with-
out convincing anyone else that their idea is sound. Some will succeed; some will flame out almost immediately;
some will do all right at first and then gradually fade away. Of course, that’s also true of people who prepare
business plans – especially those who prepare a plan and then put it on a shelf rather than using it as a “roadmap”
and reality check. But I strongly believe that those who prepare a plan and then actually use it are much more like-
ly to enjoy long-term success than those who do not. This is because the process of preparing a proper business
plan forces you to identify and deal with business realities (for example, the likely 30-35% year-round occupancy
rate for a bed and breakfast in Wallowa County) that human nature would otherwise lead you, in your enthusiasm
for the product or service, to simply ignore or rationalize away.
Next time, I’ll discuss what a suitable business plan includes, who should prepare it and if that’s not you,
what your role should be.
Myron Kirkpatrick has been providing free, confidential, locally based business coaching services for Wallowa
County Business Facilitation, Inc. since January 2001. He may be reached at (541) 426-5858 or by e-mail at my-
ronk@uci.net. All columns in this series will be archived at www.wallowacountybusiness.org.