Who should write your business plan?
My husband and I recently bought a food truck for healthy cuisine on-the-go. We've done a few 'soft opens' the past few weekends at smaller venues, but have yet to go anywhere that would attract too many customers. This is mainly because we feel like we are not ready since we don't have a business plan. We are both first time entrepreneurs and have never written one. If not us, who should write our business plan?
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Jan 15, 2016
Heather.
Since you've already made the commitment to start a business and have purchased the truck, I suggest that:
1. Turn off the engine.
2. Do some critical thinking and research.
Specifically, if you've not already done so, formulate a business model. You can find numerous examples on the web. The purpose of this exercise is to test your original assumptions with reality. It is not to your benefit to try to confirm your original beliefs (hopes and dreams), rather you need to find out what is real.
To be successful, it is never about what you want to offer, but rather what customers want, desire and can afford to purchase.
Go to the locations where you originally anticipated your customers would be. Ask the customers at the other food trucks some basic "research" questions:
1. What do they buy
2. How often do they buy from any food truck
3. What do they like about the current (truck) offerings
4. What is not being offered that they would prefer to buy
5. How often they might buy from a different truck - if that option were available.
In doing so, you have the opportunity to formulate your "unique value" and, hopefully, a competitive edge. Although your intent to offer "healthy cuisine" is understandable, virtually every market segment is saturated. with numerous and/or "similar" offerings. I'm sure your area is the same.
If you cannot come up with one, your best (and least expensive option) is to sell the truck and try something else.(You will not want to hear this, but starting over may be your least costly option.)
If, however, you can find a definable way to compete, do research on all of the other aspects of operating your business. Such as, cost of food, fuel, insurance, licensing, social media (advertising and promotion), truck and equipment maintenance, etc.
Hopefully, this analysis will yield a profit margin (above your all of your expenses) to make this endeavor a viable business, rather than an expensive hobby.
If you get to the point that there is a reasonable certainty that you:
1. Know who you target customer is
2. Know where they buy
3. Know how often they buy
4. Know what they will pay
5. Know (after all costs are computed) you will still be making a reasonable profit
Then it will be time to develop a Tactical Plan. That is, one Day One, you know what you need to do in order to prepare and travel to where your customers are and with everything you need to provide what your customers want.
Heather, there is a lot to consider. Take the time to do the critical thinking and research to assure your self and your husband that you can and will succeed.
By the way, should your ever need to prepare a Business Plan, this research and the development of a Business Model and Tactical Plan will wow whoever reads it because your Business Plan will be based upon reality, rather than assumptions, and expectations.
Hope this helps.
Oct 5, 2016
Everything was explained clearly by Mr. Eric. Will be looking into this advice.. Thanks Mr. Eric for the Answer!
Jan 13, 2016
If you need a business plan, then you really should do it yourself. Going through the process of crafting the plan will help you think more deeply about your business. As this is your first entrepreneurial experience, it would help if you got guidance on your plan from someone with experience in food trucks. There are plenty of free business plan templates available that will provide you with a good outline to start.
However, as a few others have mentioned, if you aren't pursuing financing right now, then just piece the business plan together as you go. Customer feedback is going to be some of the most valuable information that you can get. Besides, a business plan is never finished - it continually evolves.
Finally, you can always start with a simple one-page business plan - like this one - http://100startup.com/resources/business-plan.pdf and determine your budget and financial requirements if you haven't already.
Good luck!
Jan 19, 2016
Hi Gareth, thanks for the confirmation. I always thought it made most sense for the business owner to come up with their own business plan as well. My husband and I are going to first talk to some other food trucks as you suggested. Thank you.
Jan 13, 2016
It's good to understand the reason for writing a plan, including what the future holds, but there's more to it. There are different formats and ways to write a plan, depending on what you're looking for. If you need a loan, a bank has different requirements than a partner, for example. You should still put a plan together if it's just for you and your husband. It may not be as formal, but it still should contain basic components, like revenue projections, costs and net profit. Even if you're not looking for financing, the business plan can be used to make informed decisions about other parts of your business, especially when it comes to operations and marketing.
As a SCORE mentor since 2003, I'd also recommend you make a visit to a local office for free mentoring and even take some classes.
Jan 19, 2016
Hi Robbin, thanks for sharing. I intend to use a business plan to help us define some of our business operations and marketing goals like you suggested. I didn't know Score offered classes. I will check them out. Thank you!
Jan 13, 2016
Hi Heather,
It seems from your narration that you have already practically taken the initiative and started running a business.
In this scenario the business plan will be a shift of focus,motivation and energy.However, you can definitely delegate it to someone to do it for you with a target date.
The most important thing is that from the direction perspective your focus is correct and you should keep these soft introductions going till you identify customer intensive locations.
These soft opens will give you exact idea on the following:
1) Product Marketability and Acceptability
2) Customer Profile And Target Market
3) Quality considerations
4) Customer Requirements
5) Future Potential Products
6) Regulatory Environment
7) Operating Expenses
8) Pricing
9) Product Costing
10) Branding and its impact
These will also become the bases for your business plan and strategy in future.Most probably after few experiences you will be able to identify the numbers yourself.
Don't expect immediate returns and keep enriching your customer and brand equity with a focus on change and continuous improvement.
Direct interaction with customers and improving on his feedback is the best way to take your business to success.
Keep yourself in positive spirits and energy during this time of effort and hardwork with lesser than expected returns.
Best Of Luck.
Zafar
647-818-8550
North York, Canada
Jan 13, 2016
Dear Heather: With all due respect, is the business plan going to take away the fear of being a first time entrepreneurs? Do you need the business plan to get permission to go to larger markets and attract your ideal clients? Or do you think that the business plan will give you instructions on how to get the "many customers" you wish to have?
Find out the places that attract your customers (you may want to follow other food trucks for a while), offer exceptional customer service and quality of food and you will be on your way to success. Later on, when you find out what works and what does not, you may want to have your thoughts more organized and then create a "business plan" and put down what worked best and focus on doing more of the things which worked well. and write down how you will be doing these things which bring you success
and modify the others which were not as successful.
PS trying to figure out why I get this red underline!
Jan 13, 2016
I guess the PS was not necessary as the red underline does not appear here. Sorry for the confusion.
Jan 19, 2016
Hi Margaret, exactly! I think we are a little nervous as first-time entrepreneurs. I, personally, would feel much more comfortable having some sort of plan in place.
Jan 19, 2016
The reason for working on a business plan, whether you need the money or not, is to set your roadmap. By putting together a business plan you are doing the research into your market, your target audience, what makes your product unique etc. Also you can test your pricing, # of sales to break even etc. all before investing too much money into a business that you could realize may not be profitable. Yes, a plan is a lot of work, but well worth it. The SCORE organization is a great resource to help you. I also cover the Biz Plan fundamentals in a business startup guide I authored for women called "Fabulous Fempreneurship" which you might find worth reading to help you get started. http://www.volumesdirect.com/SearchResult.aspx?KeyWords=Slatter
Jan 22, 2016
Business plans serve two primary purposes: to design a way to grow and run your business and as a means of obtaining financing. The financing business plans should be done by someone experienced in this area. The operating business plans should be written by you, the business owner.
I've seen many types of business plans, from 1 page to 30! You should be able to craft a well thought out plan in under 10 pages. Here are the areas to concentrate on:
1. A summary of your business and what you want to accomplish. Describe your business in detail and why you chose to get into this type of business.
2. Mission, vision and values. People want to know who you are and what you stand for.
3. Key goals and objectves. This is important for staying on track and focused.
4. Target market & customer profile: You must know exactly who your best customers are and what they want.
5. Product & service description.
6. Competitive envirnoment: What are your customers other choices and what separates you from them.
7. Marketing Strategy and Sales Process; Where will you spend your time promoting your business.
8. Revenue and expense projections.
9. Operating plan: How will you operate your business every day? Who's involved, what are their roles? How will you turn a profit?
10. Business development and growth sechule: What and when will you take action on that will grow your business.
Going through a process like this will uncover a myriad of things you need to consider before actually diving in. It's important to anticipate issues and opportunities before you step in them. Once you have created a first draft, give it to someone with business building experience and let them evaluate it. Then, write your final plan.
Keep your business plan with you always. It's your road map. It won't do much good sitting on a book shelf somewhere.
Good luck.
Steve
Jan 13, 2016
Heather,
By all means you need to create (& own) your business plan.
David and I will agree to disagree on this one.
But, you will need some expertise not only to create the business plan but to execute it as well. My suggestion is to contact your local Score for a free, confidential mentor. Good Luck! Doug PS - Even though you are likely a Tide fan, this is in good faith ;-)
Jan 13, 2016
Heather, I agree with Doug McQuilken---You and your husband need to exercise this discipline together, and being a member of Score, I agree that a Score counselor/mentor would be excellent start. At Score we help 1st time entrepreneurs, we are all excellently qualified to do so....We are/were either all in Sr. Leadership and Management positions, owners of our own businesses and are well healed and experienced----Score would be a great resource for you both
Jan 19, 2016
I am of course a Tide fan! I still appreciate your advice very much. Thanks for taking the time to comment.
Jan 13, 2016
Jan 13, 2016
I couldn't agree more. At this stage, a road map (including an operational and marketing strategy with some projections) will be helpful. This gives you the opportunity to (regularly) evaluate your assumptions especially in the early stages of your business and will help you tweak your model to a perfect fit.
However, if you need to a business plan (which you will do at some stage), i'd recommend you write it yourself and am sure there are a lot of good and free services to help you convey your assumptions and hypothesis onto paper) Good luck.
Jan 13, 2016
You should. Planning is simple: where are we now? where do we want to be? and, how are we going to get there - month-by-month, quarter-by-quarter, and year-by-year? There are a wide variety of business plan software packages that you can use as a guide, but the input has to be yours. Be honest, realistic, and practical with your projections. Best thing you can ever do is develop a break-even analysis for your first year of operations: how much of what do you have to sell to who to cover your costs and expenses - can you do it? Take a look at the "Shark Tank" on TV for some good lessons on poor planning. You may also want to get: Guidebook to Planning - A Common Sense Approach, available on Amazon.
Jan 13, 2016
You should write your Business Plan. Who knows your new business better then you? I have Business Plan and Financial Statement templates available for you at - http://budspracticalaccounting.com/resources/free-downloads/.
Follow the outline on the template and develop all the information you can gather yourself to fill in the blanks. Contact specialist for additional information you may need; your banker, your lawyer, your accountant, your insurance agent, your suppliers, and anyone else you will be dealing with.
Make sure that you realize that this food truck must be able to support itself to the point of paying all of the expenses, including salaries for you and your husband, and must make a profit (or why bother). That may sound a bit cruel but is the facts you must face when you start a new business.
The templates will (1) give you an outline for your Business Plan, (2) supply you with templates for your Financial Statements that must be a part of your Business Plan.
Finally, when you lay out your Cash Flow Statement - you cannot run out of cash in October - if you do it's all over.
RG Bud Phelps
Jan 13, 2016
A business plan by owners is too often a case of detached fiction I'm sorry to say. What you need to have first is a life plan that details for you AND your wife what you AGREE you want from life and how the business fits into that. Anybody can write a bunch of numbers down and make an imaginary p&l but far more important is to know why you are doing specific things, what purpose it serves for you and what is at stake by both failure and success. When you know that then a business plan is far more likely to be realistic and attainable whether you do it yourself or get professional guidance.
Jan 13, 2016
A qualified professional should write your business plan. Please don't try to do it all yourself. Is it really worth saving a few dollars if your business plan will be sub-par? Use UpWork or Craigslist to find a qualified independent contractor or agency, or just use Google to find a writer in your local area with experience in business plan writing.
Jan 24, 2016
Hi Heather,
Great to see that you are Up and running. Thats a big first step.
I have read most of the comments , which are fine. and Yes like the others the only person who should be putting the business plan together is "Both of you".
The main reason is that you have to own it.
I won't spend time covering the other points, that's already been done.
I just want to add a few more points for you to consider, within your plan.
1) Remember the BP is your road map. it is not a document that you just do once and put away in a draw. It should be a living document that you review, and adjust.
Some people may say that's once you have done it, that's it and it's in stone.
Things change all the time, great businesses always adapt.
2) The BP should be designed to take away the emotional side of your business. By this I mean that it is a document that is in black and white. Something that some plans fail to include is a "Exit" Strategy. They plan for the good times, but not the hard times. Great businesses plan for both, they include a savings strategy, a purchasing strategy, a countermeasures strategy, Risk analyses, including off road due to illness, or accident, even a bottom line When to consider walking away, before the business takes everything away from you. If you face this in your planning, you will also have an exit road map. So that when the emotional times come, you have already have some guidance within your plan. THis part of the plan we hope and trust will never have to be used. but at least by having it there you will be objective.
3) within the Marketing plan one should be asking:
A) What is it that I can bring that is different and or better than the others.
B) Why should my business exist.
C) You should also think from your customers perspective, and at least answer this one question that they will be thinking but may not actually say, and that is: "What's in it for me?" ONce you know that you should be telling them without actually stating it.
Good luck with your new business, you are on the right track, it is always amazing just how many new business start up and never think about putting down a business plan. Some will succeed, but many more will fail.
Like they say If you fail to plan, then you are planning to fail.
Rgds, George. - Melbourne Australia.
Jan 13, 2016
You don't really need a business plan. You are first time entrepreneurs and what you need is to research the local market and find out where your clients are, who your target clients are, and why they should at your truck.
Very competitive business the restaurant and food truck industry. Why do you want to be in that industry?
Eugene
Jan 19, 2016
I am a business attorney and I always recommend that my clients write their own business plans, because if you are going to run the business you need to be a part of making the plan. The example I always give is this. Say you hire someone to do your business plan. They decide that you should have an ad on the outside back page of the yellow pages, which costs, depending on your market, $5,000 or more per month. You do it only to discover that your customers don't look for you using the yellow pages. You are in a long term commitment to pay for advertising that is not based on what you want to do with your business, but on assumptions that someone else made. It doesn't make sense.
Jan 21, 2016
Hi Heather!
Congratulations on your business venture! I celebrate your healthy food truck focus. Yes, it seems you need a Strategic Business Framework that includes your, WHY, a Vision Statement, Core Values that drive decision making, a Competitive Edge, problems you solve, value you bring, why do business with you, and a Mission Statement of the WHAT and HOW of every day to guide you to work not only "IN" your business, but "ON" your business.
Your framework will drive your branding, target market, marketing, and sales to achieve success!
I'd welcome the opportunity to learn more about your purpose, focus, and goals. Choose to invest your time and energy in activities to achieve the results YOU desire!
Jan 13, 2016
The U.S. Small Business Administration (SBA) provides resource partners such as the Small Business Development Center (SBDC) to help with all aspects of business planning, including business plan writing. Visit https://www.sba.gov/tools/local-assistance/sbdc to find a center in your area.
Jan 13, 2016
Richard Stern-You should write your own Business Plan.You can take classes for free at the SBA associate business institutions. You can get assistance also from professionals at SCORE. They provide consultation services.The Business Plan is your journey. Its not a Term Paper. The Plan must meet (3) conditions: Reasonable, Realistic and Doable by you. The Plan by writing will provide issues you know and issues you do not know.
The Plan is one of the most important parts of starting your business
Jan 13, 2016
I distinguish between a business plan and a strategic plan. A business plan is what you put together for 'external' purposes, e.g. people or entities who you want to consider investing in your business.
A strategic plan is more of an internal plan -- a description of who you are, what you want to accomplish, and how to do it. (Certainly there are common elements between a business and a strategic plan.) I believe you are talking about a strategic plan.
This needs to be completed by you, but should not be done by yourself. No reason to reinvent the wheel, when it comes to format and when you want something that is quick, easy and actionable. I help business owners do this all the time, and it is invaluable. Part of its great value comes from squeezing out the answer to the question: is what I want to accomplish doable?
Now, 2 points. First, you already are incurring expenses so take some risk and get going to generate revenue. However, still move forward to put a plan together.Secondly, if you want something quick and dirty, just to outline what you should do the next 12 months, take a look at the video I just put out entitled: "Quick Impact 12-Month Plan". https://yourbizsuccess.leadpages.co/2016onehoursuccessplan-optin/
It might be all you need to get those wheels rolling!
Hi Eric, thank you so much for taking the time to answer so thoroughly. After reading everyone's responses, I think I need more a strategic plan than a business plan since we are not going out to investors or trying to request a business loan. You offer up some great starting points and we are going to start there. I particularly like your ideas on market research and talking to other food truck entrepreneurs and their customers. Thank you so much!