Now that you’ve completed the conceptual development of your new business, you’re ready to start working on some of the more tangible aspects. A business plan will need to consider several different but closely-related aspects, including what you are actually going to do, how many employees (and what kind) are you going to hire, how will you gain customers, and what is all of this going to cost? Naturally, all of the conceptual information you’ve already gathered is going to need to go in, too, including the environmental and competitor data, but if you’ve been following along through our last five installments, you’ve already compiled all of that. In this section we’re going to consider the nuts and bolts you will need to put the rest of your plan together…
First off, we need to consider what you’re actually planning to do. If you’re opening a restaurant, for example, you’ll need to determine how many tables you’re going to have (how many customers you expect to serve at one time), which will drive how many waiters you’re going to need, how many kitchen personnel you’re going to need, how many food-runners, busboys, bartenders and so on. If you’re planning on covering more than eight hours each day, or if you need to rotate personnel after busy periods (e.g. after the lunch rush) you will need to schedule multiple shifts, which will mean hiring and training additional personnel. You will also need to account for how much food you need to keep on hand each day, how much it will cost, and how much storing it will cost (will you need refrigerators, freezers, air-tight storage canisters, etc); how much will heating and air conditioning cost, what licenses and permits will you need (and what do they cost), how much will linens (and laundry services) cost, and so on. I’m not saying this is simple; I’m saying it’s necessary in order to proceed…
Service and manufacturing businesses work much the same way; in each case you will need to determine how much work you expect to do each day (or each shift, if you’re working more than one) and how many people it will take to do all of those things. You will also need to know what tools or equipment those people will need, and how much space they will require to work in. If you use parts or supplies you will need to estimate how many of each you need to have on hand, what you will need to store them, and how much all of it will cost. If you’re not familiar with these details – or if you’ve never worked in the industry before – it might be worth it to hire a consultant who is familiar with these details; there are a lot of businesses that have counter-intuitive aspects to their operations. But with the right knowledge and the right help, all of these numbers can be obtained with reasonable certainty…
How you communicate them is a matter of personal style, of course. You will probably want to begin with where and when you with commence business; this will identify who your customers are, who your competition is, and how you expect to establish an operational advantage. Number of shifts and the amount of work you intend to do on each shift will establish your personnel requirements; an analysis of comparable jobs in the area will tell you what your payroll expenses will be like, and an analysis of output (e.g. how much you get done each shift) and margin will tell you how much money you can expect to make. If you add up all of the costs you’ve identified and subtract them from the gross you’re expecting to make, you can get an idea of how profitable you expect the business to be. And an analysis of who your customers are and where they get their information should give you an idea of how to reach them…
Now, once you’ve assembled all of this information you’re ready to start writing the individual parts of the business plan. We will cover each of them in detail over the next few installments, but keep in mind that nothing you write on a business plan is ever final; these sections will continue to change as your knowledge of the situation improves. Eventually your business plan will become the company’s operations plan, and the differences between your current operations and what you want them to be will become your growth plan. Combined with your projections for the future (budget and operations), this will eventually become the basis for your company’s strategic plan – but that’s a discussion for another day…
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