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Building a Business Plan: Part 1
This article by By Terry Flanagan, DC, DABCO, MPH, MBA first appeared in ACA News • Volume 1 • October 2005
The problems start to arise when the chiropractor ventures into the business community. Landlords and suppliers want to know if their bills will be paid. Lenders, and that includes everyone who is going to provide a service today in hopes of being paid at a later date, want to know if the venture is going to be viable. They all want to know if the business is going to be run by someone knowledgeable and capable of delivering the product and service. They want to know if the chiropractor has made plans to deal with the varied situations any new business surely will face. In short, they want to know you have a “plan”. How are the difficulties of starting a business going to be managed and overcome? How is the cash flow going to be generated and distributed? And, most importantly to the lenders, how is the debt going to be paid back?
It is important to understand how planning will improve your chances of success. The business plan is the bridge that will allow you to span the strategy-to-performance gap that exists during the formation of every small business. The goal of this series of articles is to allow the chiropractor to develop the basic steps of writing a business plan. Future articles will address the external and internal environment, the development of a marketing plan and how to understand and analyze financial statements.
Researching the market and writing a plan will help identify the realities of the business you are about to enter. By working through the planning procedure, clearly defining goals and outlining the method to achieve them, you will better understand the business aspect of practice. Whether you are about to enter practice, thinking about associating, starting your own practice or planning to buy an existing practice, producing a business plan will give you a solid start towards success.
The essential business strategies will be developed as we proceed. To make the plan effective, it needs to be kept simple yet contain concrete ideas that will provide the practitioner with firm guidelines. Once your concept is developed, you will possess a blueprint for your professional career. Future practice performance can be continuously monitored using the plan as a guide.
The hardest part of creating a business plan is getting started. It may seem like a daunting task at first, but once you get going, you may find writing the plan is not as difficult as it seems. The articles that follow this introduction will work through the anatomy of a business plan. The components of each article will outline and help you develop each section of your plan. The finished document will specifically define how you expect to seize the opportunity you envision and how you will execute the strategy you have identified.
There is no one right way to go about writing a business plan. In many cases, the best first step should be the development of the “Executive Summary.” The Executive Summary should give an overview of the business plan in miniature. It should be able to stand alone, almost as a business plan within a business plan. It should be short, no more than two pages, and be able to convey an overview of your ideas, thoughts and goals. It should contain the plan’s highlights and key points. The reader should be able to peruse it in a short period of time and have an understanding of what makes your business tick.
The writing of the Executive Summary will do a number of things. First and foremost, it will help to crystallize your thoughts. New practitioners have some idea of what they want to do. The difficulty, and therefore the benefit of writing this section, is to actually organize those ideas into cohesion.
The Summary should explain why you went into your profession and what you expect to accomplish. It should contain your reasoning as to why you chose your location, what you expect to build, how you expect to function, how you expect to grow and how you are going to finance your operation.
The Summary will help to set priorities. Reasoning for each item should be listed in order of importance. Documenting your priorities will force you to pick and choose from among the many points you want to make and decide on their order of importance.
The Summary will also provide a foundation for the full business plan. The information contained in this portion of the business plan will provide you with a starting point for each section. Once you have begun to organize your thoughts, successive sections of the plan will be easier to write. Gaps and problems with your plan can be spotted more easily in this section and tended to during the writing of your plan.
Developing the Summary will give you the confidence about writing what will follow. Once you have a draft on paper, the rest of the writing process will become less intimidating. As you begin to develop the body of the business plan, you will be able to review and update your Executive Summary. Ultimately, the Executive Summary will become a concise expression of your intent and direction.
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