Present Situation and Objectives
Writing a business plan is analogous to building a house. First, you need an overall plan. That's your first draft of the executive summary. Then you need a foundation, built on solid ground, that outlines and supports your business. That's your section called Present Situation and Objectives. Some business plan books and software programs call this by other names, but the function is the same: To start and support business construction. It expands your plan with more details that will be further expanded in subsequent sections of your business plan.
The first component of defining the present situation (also called “opportunities”) is analyzing the marketplace for what you plan to sell. Your executive summary mentions the market; here's where you discuss it in further detail. What you say about the market depends on the purpose of your business plan and your level of research. For example, if you're writing a start-up plan, your analysis will primarily be as a knowledgeable outsider who has done the research and maybe even worked in a similar field, but not operated this type of business. If you're writing a growth plan, you have experience in the market and can build upon it with new research and insights. Perspective is key.
Even if you have experience in the marketplace in which you plan to build your business, you'll need to do additional research. The following are some typical market environment statements:
The market for travel consultants in the Pacific Northwest is rapidly growing.
The local marketplace for tax advisors is small, but it is expected to grow later this year because of legislative changes in how businesses are taxed.
The local market for strategic planners is saturated, but there is a shortage of planners who are bilingual.
The market for website optimizers is poised to grow by 25 percent in the coming year according to a recent Wall Street Journal article.
A concise definition of the market environment for what you expect to sell can help you begin to expand your business plan and help you focus on opportunities.
An opportunity is a favorable juncture of circumstances. A new technology can offer you an opportunity to develop a proven business concept in a new way. Your business concept and market environment can be combined to help you select from among numerous opportunities.
Consider the many combinations of what you already know and what clients need. At that juncture, opportunities abound.
To take advantage of them, you must understand the circumstances and effectively use good timing. What do you know about the current business circumstances for the service(s) that you're planning to sell? What do you know and what can you discover?
Timing is everything, especially in business. If you knew what stocks would go up tomorrow or when your lucky numbers would be selected in the lottery, you could become rich. Many fortunes have been made — and lost — by the timing of events.
Timing is the ability to select the moment to do something for optimum effect. Open your consulting business when there is a great need and you will thrive. Open it a month after a major competitor opens with more services and lower fees and your business probably will expire. As you plan your business's present situation, consider its timing.
“If you don't know where you're going, how will you know when you get there?”
Too many new businesses have only one simple objective: to make a profit. Yes, but how? One of the primary functions of your business plan is to make you think about and document the business's objectives or goals.
Most businesses have more than one goal. In fact, they often have many complementary goals that must work together to satisfy the overall objective of making a profit. If business design goals are met but financial goals aren't, the business will not succeed. These goals will be expanded upon as your plan develops. Before you invest more time and money in your business concept, however, you should clearly define them. They describe where your business is going.
Business goals answer the question: How do you expect to make a profit? Your response will be something like: Acme Consulting will profit by offering practical solutions to common career problems faced by military retirees. You will then break down that statement into specific and attainable goals and subgoals.