Personal Training Business

This is an excerpt from Write Your Business Plan by The Staff of Entrepreneur Media, Inc.

CHAPTER

One Plan Does Not Fit All

Business plans have a lot of elements in common, such as cash-flow projections and marketing plans. And many of them share certain objectives as well, such as raising money or persuading a partner to join the firm. But all business plans are not the same any more than all businesses are.

Depending on your business and what you intend to use your plan for, you may need a very different type of business plan from what another entrepreneur needs. Plans differ widely in their length, detail of their contents, and the varying emphases they place on different aspects of the business.

Differences among Industries

One of the reasons for differences among plans is that industries are different. A retailer isn’t much like a manufacturer, and a professional-services firm isn’t much like a fast-food restaurant. Each requires certain critical components for success—components that may be irrelevant or even completely absent in the operations of another type of firm.

For instance, inventory is a key concern of both retailers and manufacturers. Expert, innovative management of inventory is a very important part of the success of Walmart, one of the great all-time success stories in retail. Any business plan that purported to describe the important elements of these businesses would have had to devote considerable space to telling how the managers planned to manage inventory.

Contrast that with a professional-services firm, such as a management consultant. A consultant has no inventory whatsoever. Her offerings consist entirely of the management analysis and advice she and her staff can provide. She doesn’t have to pay now for goods to be sold later or lay out cash to store products for eventual sale. The management consultant’s business plan, therefore, wouldn’t have a section on inventory or its management, control, and reduction.

“Sometimes even companies in more closely related industries have significantly different business plans.”

This is just one pretty obvious example of the differences among plans for different industries. Sometimes even companies in more closely related industries have significantly different business plans. For instance, the business plan for a fine French restaurant might need a section detailing how the management intends to attract and retain a distinguished chef. At another restaurant, one catering to the downtown lunchtime crowd, a great deal of plan space might be devoted to the critical concern of location and quick turnaround of diners with very little about the chef.

Presenting Yourself in the Best Light

You want your plan to present yourself and your business in the best, most accurate, light. That’s true no matter what you intend to use your plan for, whether it’s destined for presentation at a venture capital conference or will never leave your own office or be seen outside internal strategy sessions.

When you select clothing for an important occasion, odds are you try to pick items that will play up your best features. Think about your plan the same way. You want to reveal any positives that your business may have and make sure they receive due consideration.

Types of Plans

Business plans can be divided roughly into four distinct types. There are very short plans, or miniplans, presentation plans or decks, working plans, and what-if plans. They require very different amounts of labor and not always with proportionately different results. That is to say, a more elaborate plan is not guaranteed to be superior to an abbreviated one. Success depends on various factors and whether the right plan is used in the right setting. For example, a new hire may not want to read the same, elaborate version that might be important to a potential investor.

The Miniplan

The miniplan is preferred by many recipients because they can read it or download it quickly to read later on their iPhone or tablet. You include most of the same ingredients that you would in a longer plan, but you cut to the highlights, while telling the same story. For a small-business venture, it’s typically all that you need. For a more complex business, you may need the longer version.

The Presentation Plan

The advent of PowerPoint presentations changed the way many, if not most, plans are presented. And while the plan is shorter than its predecessors, it’s not necessarily easier to present. Many people lose sleep over an upcoming presentation, especially one that can play a vital role in the future of your business. BUT, presenting your plan as a deck can be very powerful. Readers of a plan can’t always capture your passion for the business nor can they ask questions when you finish. In 20 minutes, you can cover all of the key points and tell your story from concept and mission statement through financial forecasts.

Remember to keep your graphics uncluttered and to make comments to accentuate your the ideas rather than simply reading what is in front of your audience.

While a presentation plan is concise, don’t be fooled. It takes plenty of planning. The pertinent questions: Who? What? Where? Why? When? and How? need to be answered.

A Guide to Your Deck: The 10–20–30 Plan

Using a deck is a quick, to-the-point means of providing your best selling points, while still sending over your more detailed plan.

The question is: How do you organize and minimize the breadth of a business plan into a PowerPoint presentation? First, it’s recommended that you use the 10–20–30 rule, which means 10 slides, 20 minutes, and a minimum of a 30-point font.

1. Your first slide is your title slide, which provides the name of the business, your name and title and contact information, plus a slogan if you have one. You can then read the slide and add, in a sentence, what it is you do.

2. The next slide should introduce a problem that persists and is relatable to your target market. Statistics can help you support your comments, but cite only a couple at best. You want the audience to relate to the problem or certainly understand how it affects others.

3. The third slide should get to your solution. Briefly describe in simple terms how your business has figured out how to alleviate the problem. Make sure the audience understands that you have a unique approach. You might also add a few words to support your overall value proposition.

4. Next you want to explain how you will make money. What are your revenue sources? Who are your customers? What is your pricing structure? Then talk briefly about how you expect to profit.

5. Now present a little more detail on your operating plan. How does it all work? Self -service? Kiosks? Personal service? Give them the short version of how the business operates. From buying the goods to marketing them, to sales and shipping, give a short summary of how it works. Include a little technology—remember, “a little!” This is where you may need a second, visual slide to show how it all works.

6. Now it’s time to present your marketing plan in a few short words. After all, if you’re going to create dynamic advertising and promotional campaigns, what better way to start than briefly explaining how you plan to market the business. Give some specifics, rather than saying: “on the internet” or “on TV.” Let your listeners know that you have a plan for marketing and can keep it within a reasonable budget.

7. Competition. Mention your key competitors—be nice. Then explain what gives you the competitive edge.

8. Talk about the team. Remember, people invest in other people. This is where you introduce your team, with a few very brief highlights (one line) of each member’s background that relates to the business at hand.

9. Financials. This slide should show a clear projection with a three-to-five year forecast. Explain the method you used to arrive at your numbers.

10. And finally, show them where you are at present. What have you done thus far, and how are you looking to move forward sooner rather than later? Present a positive call to action based on what you have accomplished to date and what you will accomplish in the future.

“The miniplan is preferred by many recipients who can read it or download it quickly to read later on their iPhone.”

There are many ways to go about putting together your deck. And yes, if you need to go to 12 slides, do so, but try not to go longer.

A few tips:

Don’t talk in jargon; not everyone is deeply embedded in your industry.

Don’t post slides and then read them word for word. Your audience can read. Show something that is easy for them to digest, and use your comments to provide a little deeper explanation. This way you present more information, some printed and some verbally.

Take a breath between slides so you don’t start motoring along.

Do not focus on technology, technology, and more technology even if you are a tech company.

Don’t overload slides with too much material—people can only read and digest so much.

Remember less is more. Don’t try to pack too much into a PowerPoint presentation. Your listeners can always read the full plan for more details.

The Working Plan

A working plan is a tool to be used to operate your business. It has to be long on detail but may be short on presentation. As with a miniplan, you probably can afford a somewhat higher degree of candor and informality when preparing a working plan. In a plan you intend to present to a bank loan committee, you might describe a rival as “competing primarily on a price basis.” In a working plan, your comment about the same competitor might be, “When is Jones ever going to stop this insane price-cutting?”

A plan intended strictly for internal use may also omit some elements that you need not explain to yourself. Likewise, you probably don’t need to include an appendix with resumes of key executives. Nor would a working plan especially benefit from product photos.

Internal policy considerations may guide the decision about whether to include or exclude certain information in a working plan. Many entrepreneurs are sensitive about employees knowing the precise salary the owner takes home from the business. To the extent such information can be left out of a working plan without compromising its utility, you can feel free to protect your privacy.

This document is like an old pair of khakis you wear to the office on Saturdays or that one ancient delivery truck that never seems to break down. It’s there to be used, not admired.

“It has to be long on detail but may be short on presentation.”

“In 20 minutes, you can cover all of the key points and tell your story from concept and mission statement through financial forecasts.”

What-If Plans

When you face unusual circumstances, you need a variant on the working plan. For example, you might want to prepare a contingency plan when you are seeking bank financing. A contingency plan is a plan based on the worst-case scenario that you can imagine your business surviving—loss of market share, heavy price competition, defection of a key member of your management team. A contingency plan can soothe the fears of a banker or investor by demonstrating that you have indeed considered more than a rosy scenario.

Your business may be considering an acquisition, in which case a pro forma business plan (some call this a what-if plan) can help you understand what the acquisition is worth and how it might affect your core business. What if you raise prices, invest in staff training, and reduce duplicative efforts? Such what-if planning doesn’t have to be as formal as a presentation plan. Perhaps you want to mull over the chances of a major expansion. A what-if plan can help you spot the increased needs for space, equipment, personnel, and other variables so you can make good decisions.

Sliding By

For Tod Loofbourrow, the presentation of his plan was everything—literally. The president and founder of Foundation Technologies, a human resources software company, grew his company to 70 employees without ever having a conventional plan written down on paper.

But that doesn’t mean Loofbourrow didn’t plan or use his plan wisely. Instead, he confined his planning to creating impressive presentations, primarily in the form of slides created in PowerPoint, that conveyed the mission and promise of Foundation to investors. “We raised $8 million in venture capital with eight PowerPoint slides,” he says.

The key task of a plan, he feels, is the ability to convey the company’s story economically and convincingly rather than to amass a pile of details.

What sets these kinds of plans apart from the working and presentation plans is that they aren’t necessarily describing how you will run the business. They are essentially more like an addendum to your actual business plan. If you decide to acquire that competitor or grow dramatically, you will want to incorporate some of the thinking already invested in these special purpose plans into your primary business plan.

Your Presentation Counts

Just as fine dining locales offer finer sensory experiences than coffee shops or fast-food eateries, your presentation will differ from a working plan.

A working plan should be free from major errors, but a presentation plan must be proofread carefully several times by several people so that it is definitely free of grammatical errors or typos. You also may find inconsistencies in a working plan that you need to address as you move forward with your business planning. These must not exist in a plan ready for presentation.

It’s also essential that a presentation plan be accurate. A mistake here could be construed as a misrepresentation by an unsympathetic outsider. At best, it will make you look less than careful. If the plan’s summary describes a need for $40,000 in financing, but the cash flow projection shows $50,000 in financing coming in during the first year, you might think, “Oops! Forgot to update that summary to show the new numbers.” The investor you’re asking to pony up the cash, however, is unlikely to be so charitable.

Think Visually

From infographics to YouTube, we are clearly embracing visuals and graphics as never before. Depending on your industry and the software you are using, it may be in your best interest to utilize graphics to enhance the presentation of any business plan. If, for example, you are in the fashion, food, or design industry or you are creating a new product, your visual image will certainly be worth a thousand words. The key is to choose the best graphics and insert them appropriately—keep in mind that any visual must fit into the plan. Don’t overdo it, but consider the impact visuals are having in marketing where studies show that people are much more likely to remember any type of presentation or advertisement with visuals than those without.

Take Precautions

Because most business plans are created and disseminated electronically, it is easier for others to forward your email than it was for them to copy and hand over a hardcopy. You can use a password-protected website to post your plan and then simply give people the web address and the password. Of course, the password can also be distributed to others. By asking people to sign a non-disclosure agreement for a hardcopy or an electronic business plan, you are making it clear that you are trusting them and making them think harder about sharing the plan with others. The reality is, however, that no matter how you disseminate a business plan, if someone wants to show it to anyone else, they’ll do so. Therefore, try to send your plan to people you believe are trustworthy.

You can also provide plan readers with information and even apps to look at what it is you are proposing. Having everyone in the room on the same page, literally, can allow them to utilize interactive features and help you display any new technology that factors into your business operations.

Why You May Want More than One Plan

So you’ve looked over the different types of plans. Which one is for you? Odds are that you’ll need more than one variety. If you want to get maximum impact from your plan, you’ll need to tailor it to address the particular needs of each potential audience.

Target Audiences

The potential readers of a business plan are a varied bunch, ranging from bankers and venture capitalists to employees. Although this is a diverse group, it is a finite one. And each type of reader does have certain typical interests. If you know these interests up front, you can be sure to take them into account when preparing a plan for that particular audience.

Active venture capitalists see hundreds of plans in the course of a year. Most plans probably receive no more than a glance from a given venture capitalist before being rejected; others get just a cursory inspection. Even if your plan excites initial interest, it may receive only a few minutes of attention to begin with. It’s essential, when courting these harried investors, that you make the right impression fast. Emphasize a cogent, succinct summary and explanation of the basic business concept, and do not stint on the details about the impressive backgrounds of your management team. That said, make it concise and to the point. Remember, time is of the essence to venture capitalists and other investors.

Bankers tend to be more formal than venture capitalists and more concerned with financial strength than with exciting concepts and impressive resumes. For these readers, you’ll want to give extra attention to balance sheets and cash-flow statements. Make sure they’re fully detailed and come with notes to explain any anomalies or possible points of confusion.

Angel investors may not insist on seeing a plan at all, but as we pointed out in Chapter 2, your responsibilities as a businessperson require you to show them one anyway. For such an informal investor, prepare a less-formal plan. Rather than going for impressive bulk, seek brevity. An angel investor used to playing her hunches might be put off by an imposing plan rather than impressed with your thoroughness.

fact or fiction

Many entrepreneurs don’t write plans, so if you do, that should place you in a select group, right? Actually, it’s a pretty big group. Famed venture capitalist Frederick R. Adler estimates he’s seen 3,000 plans, but most, he says, “are pretty lousy.”

If you were thinking about becoming a partner in a firm, you’d no doubt be very concerned with the responsibilities you would have, the authority you would carry, and the ownership you would receive in the enterprise. Naturally, anyone who is considering partnering with you is going to have similar concerns. So make sure that any plan presented to a potential partner deals comprehensively with the ownership structure and clearly spells out matters of control and accountability.

Customers who are looking at your business plan are probably doing so because they contemplate building a long-term relationship with you. They are certainly going to be more concerned about your relationships with your other customers and, possibly, suppliers, than most of your readers. So deal with these sections of your plan in greater depth, but you can be more concise in other areas. Customers rarely ever read a company’s business plan, so you’ll probably have your miniplan available for these occasions.

plan pointer

Instead of writing a whole new plan for each audience, construct a modular plan with interchangeable sections. Pull out the resume section for internal use, for example, and plug it back in for presentation to an investor. A modular, mix-and-match plan saves time and effort while preserving flexibility. Many people do this with resumes: They have sections that they include or take out depending on the job for which they are applying.

Suppliers have a lot of the same concerns as customers, except they’re in the other direction on the supply chain. They’ll want, above all, to make sure you can pay your bills, so be sure to include adequate cash flow forecasts and other financial reports. Suppliers, who naturally would like their customers to order more and more, are likely to be quite interested in your growth prospects. In fact, if you can show you’re probably going to be growing a lot, you may be in a better position to negotiate terms with your suppliers. Like customers, most suppliers do not take the time to read lengthy business plans, so again, focus on the shorter version for such purposes.

Strategic allies usually come to you for something specific—technology, distribution, complementary customer sets, etc. So any plan you show to a potential ally will stress this aspect of your operation. Sometimes potential strategic partners may also be potential competitors, so you may want to present your plan in stages, saving sensitive information such as financials and marketing strategies for later in the process when trust has been established.

Managers in your company are using the plan primarily to remind themselves of objectives, to keep strategies clear, and to monitor company performance and market conditions. You’ll want to stress such things as corporate mission and vision statements and analyses of current industry and economic factors. The most important part of a plan intended for management consumption is probably in the financials. You’ll want to take special care to make it easy for managers to compare sales revenue, profitability, and other key financial measures against planned performance.

There’s one caution to the plan-customization exercise. Limit your alterations from one plan to another to modifying the emphasis of the information you present. Don’t show one set of numbers to a banker you’re trying to borrow money from and another to a partner you’re trying to lure on board. It’s one thing to stress one aspect of your operation over another for presentation purposes and entirely another to distort the truth.

Expert Advice

Help When You Are Ready to Create Your Business Plan

“Keep the plan as short as possible and very simple to read,” says Scott Simpson, formerly of Battery Associates. “Remember that the plan is a road map and a catalyst for the business. Don’t get bogged down on details that don’t matter. It isn’t going to be helpful to have 30 pages of analysis discussing why revenues five years out will be $100 million vs. $110 million.”

Simpson says that companies need to concentrate on the important stuff, like why your business will provide a compelling solution to a big problem, and why your company and not the others will be successful. “There’s no need to spend tons of money on the plan. Gimmicks are cool, but at the end of the day, the content must stand on its own,” he says.

“Also, don’t create your plan in a vacuum. Read analyst reports, attend trade shows, understand your competition, and, most importantly, talk to potential customers. A plan written without knowledge of what problem you’re solving for your customer represents a business that will most likely fail. Finally, know your audience. If the business plan is intended to help secure financing for your company, make sure that it covers the most vital information on which investors will focus.”

Jim Caruso, founder and chair of Telecom Alley Inc., offers this advice: Clearly determine the audience for your plan, and write the plan for that audience and its interests phrased in its own words. Understand and closely follow any guidelines provided by your venture’s backers, such as VCs. Differences may include expected length of executive summary, number of years of financial projections, projected funding sources, and investment horizon and exit strategy. Each audience has its own leaning. Investors’ interest often shifts with changes in market conditions, so stay on top of their considerations.

Events in the stock markets can kill your opportunity if your idea falls from favor in financial circles. Pay attention to what is taking place in the economy as you might need to adjust your business plan or hold it until your business better fits the economic environment. This isn’t to say that a down economy means you can’t start a business. Quite the contrary, many businesses do well in such an economy if they are helping people weather the storm by providing good prices on necessities or offering solutions to problems caused by the economy. If, for example, your consulting firm educates businesses on how to spend less and retain more employees, you may be looking for funding at the right time. If you seek outside investors, understand valuation methods that determine what your venture is worth. Understand dilution of shareholding and how that affects your control of your own fate. Recognize that investors want the opportunity to cash out or exit. Most realistically, a successful exit comes from acquisition, not an IPO. Consider which companies are potential acquirers. This is actually a part of speaking directly to the interests of your audience, the investor.

Stay flexible and silent about what you believe the venture is worth until you are in serious negotiation. It is best to have a VC firm’s term sheet without ever stating what you believe the value to be. This avoids leaving money and shares on the table that could be yours. Expect the business plan to be a living document that improves with every tough question asked by a potential investor, business partner, or customer.

Include Investments

If you are already invested in the stock market, bonds, or even more directly in other businesses, you should let this be clearly known in your business plan. This provides readers with

1. an understanding that you are somewhat versed in matters of investing,

2. your level of risk tolerance, based on your investments, and

3. your plans for growth or ability to raise capital depending on your choices of investments.

Investing indicates that you are planning ahead and looking to make profits either through long-term growth or through dividends and other income-producing investment vehicles. Personal investments, and, of course, business investments, are important to readers as they paint a picture of how you will handle financing.

This is an excerpt from Write Your Business Plan by The Staff of Entrepreneur Media, Inc. This book is available at all fine book and ebook retailers.