A BUSINESS PLAN is the map that will guide you through the twists and turns of becoming an independent planner. The plan doesn't have to be long, complex, or difficult to create.
“My business plan is pretty simple,” says Joyce Klahr, owner of Site Selection & Meeting Planning Inc., Hollywood, Fla. “Altogether, it was no more than a couple of pages, but it has helped me to stay focused on how the business is grounded.”
How to Get Started
The first step is to find a good accountant. “You should be speaking to an accountant before you put your first pencil to paper, so to speak,” says James R. Daggett, president, J.R. Daggett & Associates, Chicago. “Find one in your area who has worked with small startup businesses, sole proprietorships, and so forth. An accountant who has experience working within the Small Business Administration could prove to be a benefit as well, especially if you think you might want to go after funding at some point.”
Next, you need to decide on your ownership structure: whether your business will be an S corporation, an LLC (limited liability corporation), or whether you will incorporate.
Josh Perlett, Renaissance Monkey, Chester, N.J., decided going the LLC route was best for his company. “We chose LLC on the advice of our business consultant,” he says. “The advantage is that the LLC combines the personal liability protection of a corporation with the tax benefits and simplicity of a partnership. In other words, the owners, or ‘members’, of an LLC are not personally liable for its debts and liabilities, but also have the benefit of being taxed only once on their profits. In addition, they're more flexible and require less ongoing paperwork than corporations. We're a small, two-partner firm, and we need to keep accounting/paperwork to a minimum.”
If you're small enough, the financials section of your business plan may be nothing more than a cash flow projection — where the funds are coming from to keep you going through the first year, how much you expect to make in the second year, and so forth. A detailed outline that gets you through the first couple of years will help to guide your business and keep you afloat.
“Be reasonable, practical, and most importantly, conservative,” says Daggett. “Forecasting sales is a tough job for almost anyone, but for a small company, it can be even more difficult. It typically could take two to three times longer to make a sale or secure a client than what you might think.”
Other items to include in the financials section of your plan are whether you'll have employees or use contractors, and how you will charge clients. “Whatever you do,” advises Daggett, “don't neglect to forecast taxes, be they payroll taxes, sales taxes, or business taxes. Budget for them, and pay them regularly. Also don't forget about insurance, especially general liability, life, health, and others.”
If you think of your business plan as the foundation and the structure for your business, you then have several decisions to make. Who will you let in the building, and who do you want to keep out? Those invited in are your customers. Those you want to keep out — but keep an eye on — are your competition.
“I targeted my customers from contacts I had in previous jobs,” explains Ann Dorman, CMP, Meetings & Events of Distinction, Alexandria, Va.“I've been a meeting planner for 20 years and had built a network of potential clients.” By listing those potential clients in her business plan, Dorman could focus on her core customers. Then she eventually began to network and open the company to other avenues of business.
“A benefit of identifying customers in your plan is that you can target your marketing,” she says.
Of all the areas to be detailed in a business plan, marketing is one of the most important. No one is going to know you're out there if you don't tell them. The trick is figuring out who, when, how, and where to tell them.
“I tried to be as detailed as possible, with a timeline of everything I wanted to accomplish in the first year and how I planned to accomplish it, with allowances for flexibility,” says Kimberly LaBounty of Apex Management and Special Events Inc., Elmhurst, Ill. “As I went along, I discovered that one marketing method worked better than another, which required some tweaking of the plan. But there were certain actions that I knew had to take place, such as creating a brochure, a Web site, and so forth. Those were among the first items I detailed. The more organized I can be ahead of time, and the clearer I can make my expectations, the easier it is for me to stay on track.”
Just remember to stay flexible. It could be the one marketing mistake that trips you up in your fledgling months. “Don't pass up an opportunity because it wasn't written in the plan or included in the budget,” says LaBounty. “Also, don't get trapped thinking most of your marketing efforts can be accomplished without a plan. The biggest challenge of an independent planner is focus. An independent is wearing so many hats that a clear strategy will help you to stay focused, achieve your goals, and stay within your budget.
“It's a lot of work to sit and think through a one- and five-year plan for your business,” she adds, “but it will save time later.”
Thomas Tennant is a contributing editor toCMI. He is based in Cleveland.
These Web sites offer tools for, tips about, and examples of business plans:
- United States Small Business Administration
- SCORE Association
- Center for Business Planning
- Writing a Business Plan
- Small Business Marketing Management Resource Center
- Yahoo! Small Business
- SoYou Wanna?
- Quicken Small Business
The Most Important 3 Questions You'll Ask
To fuel your marketing machine the way Kimberly LaBounty did, answer these three key questions about your new business:
What is your niche?
What does the current market look like?
What is your marketing budget?
“These things helped me understand who I wanted to reach, and helped me to determine the best way to reach them, and how much of what I wanted to do was affordable,” says LaBounty, owner of Apex Management and Special Events Inc., Elmhurst, Ill.