The vision had hit Roger late one night. He suddenly knew the solution to all his problems: he just needed to start his own business. He had some vague ideas of what he wanted to do. But he figured he would just go ahead and get started. If he took it a step at a time, he was sure a plan would come together. Six months later, Roger looked back on all the time and effort he’d wasted. He’d run down so many dead ends that he was ready to give up. Instead, he finally took the advice of a wise old friend who had been the first to learn of Roger’s vision for a business. Roger sat down and wrote out a business plan. Then, he took the plan to his wise old friend to review the plan point by point with Roger. When they were done, Roger for the first time had a clear idea of how to go about starting his business. No more wasting time.
Planning
Planning is a good idea when forming an LLC to support a new business. There’s probably more to starting a business than you think. Things need to come together in order, step by step and with the right timing. Planning ahead means not having to do steps over again, fixing the mistakes you made that only show up later. Planning also means discerning in advance the advice, resources, and support you’ll need to make your business a success. Planning helps you research and reach out for that advice, those resources, and that support. Planning opens your eyes to both the opportunities and challenges of your business, so that you can pursue the opportunities and avoid or overcome the challenges. Do some serious planning. You won’t regret it.
Journal
Sure, the plans for your LLC are all in your head. It’s good to think about things. You’ll get productive insights at any time of the day or night. But write down your business ideas. Keep a paper or electronic journal in which you record your ideas as soon as you think of them. Writing ideas down helps you remember them. It also helps you evaluate them. That idea that looks brilliant in the middle of the night might not look so smart in broad daylight. But the bad ideas may actually be better for you than the good ideas. When you record all your ideas, good and bad, you can soon see the things to avoid just as clearly as the things to pursue. And avoiding the bad ideas may save you far more time, trouble, effort, and money than the good ideas help you pursue. Within a few days or weeks, you will have filled your journal with your own insights and wisdom. And anytime you find your planning stuck, just look through your journal. You’ll quickly get direction and inspiration once again.
Plan
A journal, though, is not the same thing as an LLC business plan. As soon as you feel your thinking about your business coming into a little focus, start a business plan. Start taking the best ideas from your journal to shape into a business plan. Your journal doesn’t organize anything. It just records your thoughts. Your business plan organizes those thoughts into a sensible structure. And that’s what a business plan is: orderly, sensible directions for how to proceed with starting your own business. Don’t write your business plan for a potential partner, investor, or lender. Partners, investors, and lenders may require a business plan, making you glad you wrote one. But write your business plan for you. You’ve got to believe and trust in your plan. It’s all on you.
Sections
LLC business plans typically have certain sections to them. Organize your business plan any way you want. You don’t have to do it the way that the Small Business Administration or anyone else recommends. But consider including these sections:
a description section with your business’s mission statement, legal structure as an LLC, preferred ownership, expected location, and anticipated operations;
a market analysis section identifying your LLC’s customer or client demographic, its size, its needs, how other businesses are or are not meeting those needs, and how your LLC plans to do so;
an organization and management section describing how you will form and manage your LLC, including any structure for departments, functions, and employees;
a goods or services details section, in which you describe the specific products or services your LLC will offer, including features such as packaging, pricing, and delivery;
a facilities and equipment section describing the required facility type and the necessary technology, equipment, and furnishings, and estimating facility and equipment costs;
your marketing and sales strategies to bring your LLC’s goods and services to the attention of your customer or client demographic; and
your financial projections for the LLC, including annual expenses, sales, income, and profit.
If you plan to use your business plan to ask for member contributions of money or loans, then add a funding request section at the end. Once you’ve drafted your business plan, summarize the sections in a single executive summary at the plan’s beginning. Readers may not get past the first page. Give them the highlights on the first page with your executive summary.
Use
Use your LLC’s business plan to help you evaluate, modify, and improve your plans. No one will learn more from the plan than you. Don’t treat your plan as a static object. Keep revising and refining it until you’re sure you know what you want and need to do. Share your business plan with trusted advisors. Listen to their comments. Listen especially to your plan’s harshest critics. They may be wrong, and you are welcome to decide so. But somewhere in their criticism may be a precious grain of truth. If so, change your plan accordingly. But also be cautious with whom you share the plan. Competitors willing to steal your plan may be out there. Remember the adage not to tell the devil your plans because he’ll be sure to set about stopping them or, worse, encouraging you along the way if your plans are bad for you. Be thoughtful about those with whom you share your plan. Share your plan only with individuals whose intentions and insights you trust. And share it only in person, not online, where things can bounce around.
Key Points
Keep a journal of your ideas for your LLC.
Turn your journal ideas into a written LLC business plan.
Share your plan with trusted advisors.
Modify your plan according to their best advice.
Use your business plan to recruit members and investment.