A message from Adrian Rudzikas, CEO, Business Plans Canada

Small businesses account for 98% of all business in Canada and they provide 30% of the country’s GDP and account for millions of all jobs. Approximately 130,000 new businesses start up every year.

Small business is the economic engine of Canada, but it is also a vulnerable sector. Business failure statistics show that about 96% of small businesses (1–99 employees) survive for one full year, 85% survive for three years and 70% survive for five years (Key Small Business Statistics – January 2009, Industry Canada). Micro-enterprises (businesses with 1 to 4 employees) have a slightly lower business failure rate than other small businesses. After five years in business, 70.4% of micro-enterprises survived compared with 66.9% of other small businesses.

This failure rate can be attributed to numerous factors, but the primary source of the problem is poor planning at the start. Too many potential or existing business owners do not recognize the complexity of running a business; they may not know their market, the industry or even the incredible depth of detail required to plan for every single cost required to open and operate a business.

It has been our experience that once potential business owners begin to identify how much they need to know, they either hire someone with experience in the industry to help them, or they recognize that they do not have the knowledge or resources to make a go of their business idea.  Sometimes it becomes painfully obvious that clients simply cannot bring in the revenues needed to survive, or that they will not get funding because their financial projections show poor returns or lack of business knowledge.

A business plan assists people to really look at the validity of their ideas and the applicability of their knowledge, experience and interests can avert potential bankruptcies or encourage people to continue developing their innovative ideas and make a difference in their communities. It allows people who plan to start a new business, or who want to expand one, a better chance of success because they will be well informed about every aspect of running the businesses.

The second benefit is related to quality of life. Once a potential business owner has clearly identified the validity of starting a business they can implement their plan and begin the hard, yet satisfying work of owning a business. Surveys by banks and social agencies clearly show that 29% of Canadians believe owning their own business improves their quality of life; this is especially true for home-based business operated by women. Running a small business from the home allows women with young children to balance the family/work demands while earning a living.

By helping new businesses get off to a solid start, or existing business to strategically expand expansions, Business Plans Canada aims to provide a service that supports major life decisions through intelligent planning processes.

In today’s business climate, you will need to have an exceptional business plan if you wish to raise financing for your great new business idea, or if you want to expand your existing company. Your business plan must not only clearly explain what your great business is all about, but it must realistically spell out the risks; your ability to pay the money back; and what experience your management has in overcoming obstacles and staying the course. You will discover that all this entails a huge amount of information-seeking, fact-gathering, creative thinking and skilled writing. Ensure your financial assumptions are realistic and achievable. There must be no holes of logic in your arguments, and no mystery in how your numbers add up to success!

As well, your business plan will have to read well, be enthusiastic, show confidence in your ideas, and emit an indisputable sense of “I am going to make this happen.” Here are some  guidelines to consider when writing your killer business plan:

1. Undertake all necessary market research before writing your business plan. Know your market intimately! Most successful entrepreneurs have an excellent handle on their market going in.

2. Ensure that your plan is aimed at the correct target with the right kind of ammunition. Is your audience a lender, a partner, the government or an investor? It’s important that your plan is targeted to your desired audience.

3. Make sure your plan is understandable to your audience; avoid using too much jargon; and present it in layperson’s terms. Your target audience may not be familiar with the technical jargon of the field.

4. Reflect professionalism throughout and have no spelling or grammatical errors. Have correct and accurate content, and maintain a positive but realistic attitude.

5. Don’t underestimate your competition. Do your homework and gather accurate facts and figures about them. Keep in mind they have been around for a while, and although you know you can do better, make sure you have learned from their mistakes and can overcome what they couldn’t.

6. Present a solid financial forecast using a standard format. Remember that all financial assumptions have to be accurate, realistic and achievable. Be ready to answer questions about your whole financial plan.

7. Undertake research on all the key areas that a business plan should include. Make sure that all  sections are adequately dealt with, and remember that comprehensiveness is mandatory.

8. Last but not least, make your plan compelling. Keep in mind your business plan must attract attention and create sufficient interest to keep the reader motivated and interested right from the very first page.

9. Once you’ve finished writing the first version of your business plan, take a critical look at it as many times as necessary. Avoid presenting a draft version to your audience. If it is possible and feasible, get it reviewed by others and incorporate their feedback. Keep in mind the above is just some advice to consider when writing a solid and professional business plan.