How to create a business plan

You've probably heard the adage, "Failing to plan is planning to fail." Like many of these sayings, this one has a lot of truth: Planning before you start your practice is probably the most important thing you can do to assure a successful practice.

For most new business owners, a business plan is essential to acquire funds from a lender. But even if you do not need funds to start your chiropractic business, you will benefit from preparing the business plan.

Why is a business plan so important?

• It is required by lenders for obtaining startup funding;
• It enables you to map out your course — to tell you where you're going;
• It forces you to answer key questions about your business before you begin;
• It clarifies your goals; and
• It communicates your mission and vision.

HOW TO WRITE YOUR PLAN

Here are the steps you'll need to follow to write your plan:

1. Brainstorm. Spend some time dreaming, visualizing, and thinking.

2. Develop marketing and sales plans. Answer these questions:

• What am I marketing? (What is your USP [unique selling proposition] concept?); and
• Who am I marketing to? (Gather the demographic data you'll need to start your sales forecasts. Prepare sales forecasts, month by month, for the first year.)

3. Develop a financial plan. After you've prepared your sales and marketing forecasts, work on your financial plan. Include income estimates from the sales forecasts. Itemize all expenses as completely as possible.

4. Prepare a management plan. It needs to describe how you will manage your practice. Include information on your professional background, any employees you will hire, and practice advisors (such as an accountant, practice-management consultant, and attorney).

5. Write an executive summary. This is a one-page description of everything in your business plan. Place this summary at the beginning of the document.

6. Review everything you've written. Check all financial data to be sure it is accurate and consistent, and proofread.

SOME SUGGESTIONS

• Be honest. Don't attempt to hide key negatives; they will come out anyway. This doesn't mean you should emphasize your lack of experience, but don't say you have money when you don't.

• Write in the third person. Write as if you were a consultant for this business, referring to yourself as "Dr. Smith ..." or "Smith Chiropractic is ...." This is a more professional way to write.

• Write in 'business professional' style. Use transition words and phrases; write as if you were talking to the businessperson reading this.

• Use meaningful visuals. If you have some key financial information, use a chart or graph to portray it. But don't include a lot of meaningless charts and graphs just to impress your reader.

• Use the KISS principle: Keep it short and simple. If you are writing to a lender, he or she is only interested in the basic information and won't read long discussions on the "wonders of chiropractic."

A great, to-the-point, 20-page business plan will be more effective than a long, windy, pointless one.

USE THE SBA-FORMAT BUSINESS PLAN

You can't go wrong if you write your business plan using the format recommended by the Small Business Administration (SBA). This includes:

1. Executive summary;
2. General company description (including legal form);
3. Product/service plan;
4. Marketing plan;
5. Management plan;
6. Operating plan; and
7. Financial plan

For more information on financial planning, go to www.StudentDC.com, "Financial Planning."