So you’ve decided to investigate writing a business plan…where do you start.
CHEAT! See what has already been done. Find business plan samples in the same industry you are interested in. While I don’t want to endorse any particular source available realize that they are everywhere. For example, Bplans.com provides a small database of business plans that you can edit (for a price) using their Business Plan Pro software. However, there are various free resources that are available. Two notable freebies are at CarnegieLibrary.org and ReferenceForBusiness.com. Be careful in reading the examples from any one site however. They are not your business. They do not serve your clients or customers. They do not operate in your marketplace. They don’t have your financial assumptions, income statements, or balance sheets. You cannot just put your name on one of these and open for business.
So you’ve decided to do some homework. GREAT! First, homework requires some effort. With the internet, the effort is usually just a few keystrokes. The internet and your local library offer a ton of useful information that allows you adapt any business planning template to your specific market.
The United States Department of Commerce’s Bureau of the Census conducts a lot of research on U.S. commercial and consumer markets. The information they collect is free! Use it! Their online source is [census.gov]. One of the most useful tools they provide is the American Community Survey. It provides fairly detailed data about a specific geographic market you might be considering targeting with your business. It provides data concerning income levels, home values, age, race, etc. This information can be extremely useful depending on the type of business you are thinking about. For example, if one was interested in a home repair business a simple entry of a zip code can reveal the physical characteristics of the housing units in that zip code such as age of homeowner, year built, vacancy rates, etc. This information allows the user to better focus marketing efforts on neighborhoods that might need more maintenance attention than others. A quick search of my zip code on this site reveals all kinds of information. For example, the median age is 33, younger than the national average. 13.5% have some type of disability status, much lower than the national average of 19%. 56% of the folks in my zip have some type of bachelor’s degree, over twice the national average (it’s a college town…GO TIGERS). Our median family income is about $61,000, about 20% above the national average. Again, some of this is useless trivia…but it can be a goldmine depending on what data you need to determine if your business is viable. Additionally, for an established business the census data can be drilled into down to the street level so you can truly target your marketing efforts on the demographic you want to reach.
If you are trying to logically determine a good location for a retail business the decision should focus on revenue generation. In the past I have used vehicle traffic counts as one factor to consider. Traffic counts means exposure to your customers. Your state department of transportation’s website probably provides this data free too. All kinds of information is available. If you can’t find it on the internet it might be time to put the bagel and grande’ café latté away and head out to the library. You’d be surprised how great a good research librarian can be. We’ve got one in town that knows where to find any nugget of knowledge that has ever been collected for business research. If your local library has limited resources and subscriptions try a local college or university and ask specifically for the research librarian.
Again, depending on what you are looking for you may want to try some good ole’ hardcopy library references such as:
- Susan Mitchell’s American Generations: Who They Are. How They Live. What They Think.
- American Incomes: The Demographics of Who Has Money.
- Cheryl Russell’s Best Customers: Demographics of Consumer Demand.
- Hoai Huong Tran’s Household Spending: Who Spends How Much on What.
- Lifestyle Market Analyst is a good data source of what people do in their spare time. It breaks down different metropolitan areas in terms of hobbies such as reading, fishing, hunting, gardening, etc.
- Encyclopedia of Associations is a listing of industry associations…and their websites. This is an invaluable tool to find detailed information about a specific industry.
The real work. While the templates for business planning are widely available you will still have to fill them in with your unique business pitch, strengths, opportunities, etc. This requires some effort. But once you’ve done your homework you will have a better understanding of your business niche, your competition, your customer, and, how to reach your customer. While the real work may take some effort it can save thousands of dollars in business mistakes and wasted marketing.
Image: Research Triangle Foundation