Business Plan
The business plan is not just a piece of paper your banker or creditor requires before you can borrow capital. It's a roadmap for reaching your destination, a blueprint for construction of your business. The last section discussed reasons for business failures, revealing that the overwhelming majority can be traced to poor management. The business plan is your management tool for prevention of failure; to state this in positive terms, it's your management tool for success.
Accounting software such as QuickBooks Pro and Premier, Peachtree, and others have sections on creating business plans. Standalone software, such as Business Plan Pro, Individual Business PlanMaker Professional, and Business Plan Writer, can be purchased as well. You can also find Internet sites such as
Entire books have been written about business plans, illustrating how complex the process can become. However, it needn't be overwhelming. Your new business won't require an elaborate plan, just one with the flexibility to handle alterations and additions as you grow. Should you desire a very simple plan, begin with the one below.
Business and Owner History
Whether you are applying for expansion capital for an existing business or planning for a new one, you must convey your history. If your business is a startup, provide details regarding the skills you have gained from past experience.
The bank or investor uses this section, but completing the personal inventory benefits you as well. Seeing your qualifications profile in print accomplishes two things. It reveals the strengths on which you can capitalize and areas of weakness you must strengthen.
Summary of Business
Sometimes called executive summary, this step includes business description, location, and description of principle products and services.
Business Description
Include the name and particulars of your business: address, phone numbers, Web site, and other relevant information. Consider these points when you decide on a name. Let your name advertise for you. Right now, you need a name that tells the public who you are and what services you offer. Smith & Associates sounds professional, but professional what? With Smith, you'll spend more advertising money than with a name such as Security Associates.
It's true that some successful PI firms have not adhered to this advice. They argue that Smith & Associates provides the impression of an upscale firm — they're willing to expend additional advertising monies in order to continue that perception. Make your own decision.
In your business description, provide an overview of your services. Do you specialize in one area, such as missing persons and skip tracing, or do you offer other services? List them all.
Business Location
Describe your potential client and the location that will draw him to your business. Will you seek the high-end client? Attorneys and professionals? If so, take a walk through their offices to get a feel for the atmosphere that says success to them. If you can afford it, create this atmosphere in your office.
Principal Services or Products
Describe the services that you've listed earlier. Be specific. Will you perform the services yourself, or will some require skills you don't possess? Will you purchase special equipment in order to offer these services? If you sell products, describe them, along with any restrictions on their use or special storage and/or display requirements.
Market and Competition for Services or Products
Who is your market? Where are they located? Why are they a possible market for your products or services? Note who your competitors are, how they conduct business, and what their fees are.
Do a little reconnaissance to determine the competition's marketing scheme, line of products, services, pricing, and fees. Be careful, however; don't waltz in and openly take notes or ask too many questions. No one likes reconnaissance, but PIs are especially secretive. A better method of reconnaissance is to speak into a small tape recorder — discretely.
Available Management and Resource Personnel
Who will work with you and what are their strengths? What are their backgrounds and skills? Profile your accountant, attorney, and any associates or investors. Do the same with consultants, but remember that this plan is for you. Allow it to show you where the holes exist in your management team so they can be filled with competent employees, consultants, or resource personnel.
Business Goals and Timeline
In this section, be specific as to how you intend to grow the business. Specify how much you plan to gross in six months, one year, three years, five years, and so forth. If you plan to add products or services, identify each one and discuss when and how you'll purchase and introduce them. List vendors or possible vendors. Want to add investigators, a secretary, vehicles, or specialized equipment? Add the specifics. Want to add a second office in another part of town or in a different city? It all goes here.
Of course, you don't have to plan for the life of your business right now, but think as far ahead as possible, and use these suggestions to help with setting goals. Use your business plan as your roadmap, and watch it grow and morph in any direction you desire.
Financial Needs Summary
State your financial start-up needs. This involves pricing everything you'll need, from paper clips to surveillance equipment to furniture. It takes time, but is the only way to ensure that you'll have enough money to generate the healthiest possible start. Include monthly expenses as the beginnings of your budget, and add at least six months operating costs to provide a cushion.
Projections of Earnings and Investor Returns
Provide a description of how you'll return any investor earnings. Work with an accountant to ensure accuracy and feasibility.
Target Market Description
Specialists recommend that new owners identify and focus on the prospective client who possesses the highest potential for monetary return as the target market. This doesn't mean that your market should be entirely limited to this client group, but resources spent gaining these clients are likely to be returned along with profit. This long-held theory has undergone some criticism in recent years, however. One reason is that many investigators insist that they can't compete in today's market by putting most of their eggs in the target market's basket. They prefer to offer a large menu of services to a larger market. They believe clients expect it. You must decide which theory is best for you.
Comparison of Company Services to Competitor Services
Describe your competition's products and services in detail. In what way are you better than your competition? How do you do your specialty better than anyone else? Why would a client choose you rather than the competition? Can you discover areas for improvement; if so, how will you implement improvements?
Marketing and Sales
Startups tend to underprice the competition. This is not a good idea. Don't spend time gathering clients whose only concern is low prices when you must eventually raise yours to stay in business. When you raise them, you'll have to go after new clients who will pay your new prices.
Don't undervalue your worth. Perception is key. Don't tell the world that you aren't worth the price everyone else charges. Of course, if a few agencies hold a monopoly in your area and have priced their services egregiously high according to areas with more competition, you may want to rethink this issue.
Advertising Venues
Advertising is a large part of your business plan. This is the section in which you indicate the type of advertising you intend to use. Describe the medium in which you'll advertise, how much it will cost, and how you'll pay for it. If you want to increase advertising as you grow, specify how and when.
Policy for Credit, Returns, and Rentals
Determine your policies for returns and rentals. What will your return policy for clients who become dissatisfied entail? You'd better know before that irate client complains about your investigator's expense charges. In fact, this policy should be included in the client agreement or provided at the time the agreement is signed. If it is provided in a separate document, leave space for the client's signature acknowledging receipt. Many investigators refuse to return money that has been legitimately used no matter the complaint. Others provide an unconditional money-back guarantee as to their services. Study the policies that others have set up and put together one that fits your needs. Better yet, speak with an attorney.
