UW Extension Education: Business Planning Basics

Starting a business might seem like a scary thing to do. 

Considering other successful businesses with a physical or online presence, it can be tempting to dismiss a potential venture because it’s “too ordinary” or “it would be too much work.” 

The other end of the spectrum involves running blindly down a path of buying and selling, expecting things to just work out on their own. 

A successful business owner will avoid these two extremes, acknowledging running a business will require effort – often mundane effort – yet finds fulfilment in the process. 

The rewards of owning a side hustle or a Fortune 500 company belong solely to those who do what they can with what they have, and anyone can do this.

Writing a business plan is a great place to start before committing to the journey of business ownership. 

The best part about crafting a business plan is it is a fail-safe activity. If the idea turns out to be less than ideal, then all that is lost is the time spent exploring this alternative. 

A successful business venture will only be helped by sufficient investigation prior to an official launch.

Hopefully the following steps will pave the way to crafting a robust business plan.

Create the vision

A business requires a vision which is clearly identified by the person or team beginning the venture. A vision is necessary because it gives direction to the efforts made in the process of operating the enterprise and establishes what success looks like.

Without a vision, a start-up can fail very quickly because of frantic attempts to do too many things at once. 

The vision should be broadly written but practical and achievable at the same time. This allows for a large enough scope to permit growth or improvement, while also placing the target within reach from the beginning. 

A few examples of vision statements include “transform condemned and wasted resources into marketable products” and “responsibly steward livestock, land and people toward their flourishing.”

These are good examples of vision statements because they are specific but not restrictive, allowing for constant improvement while providing direction for day-to-day activities and long-term planning decisions alike.

Identify a mission

Once a vision of the business is established, a mission or purpose should be identified as well.

The mission of the enterprise answers the question of “what does this business do, and why does it exist?”

The mission might be making the best homemade soap in town, recycling green waste from the neighborhood to reduce the landfill load or providing a remote bookkeeping service to clients so they don’t have to travel.

The mission and vision go hand in hand and might need to be adjusted over time.

If using the analogy of a car, the vision might be thought of as the windshield and the mission is the engine.

Set goals

Although crafting good goals can be a challenge, there is no replacing the clarity and sense of direction the process of setting goals can bring.

Setting goals creates tangible steps to take along the path toward the vision. Goals can apply to different aspects of the business and different time scales as well. Even the business plan writing process might involve goals. 

The best measure of a good goal is the mnemonic “S.M.A.R.T.,” which stands for specific, measurable, attainable, relevant and time-bound. 

A good goal might be something like “enumerate resource requirements for two new products before Dec. 31.” 

In the planning process, a goal might be “identify and interview one business competitor about how to manage insurance before the end of May.”

It is important to keep goals for the business plan focused on the first six to 12 months of operation and restrict these to five goals or objectives at a time. 

Too many goals can create a situation where there seems like too much to do, while if only a few goals are established and met, the goal setting process will need to be repeated frequently.

Provide context

An important step in the business planning process is to set down the historical context that led to the idea of starting a business. 

Perhaps there was a need identified in the community which has been unmet for several years or a consistent demand from potential customers wanting a particular product. Potential business owners may have work experience or educational background which qualifies them for the type of venture they are considering. 

This section of the business plan can be only a few sentences, but it is helpful to clarify the motivation behind starting the business. If the reason is simply “life is too boring,” then the desire to carry on the business may fade quickly.

A short section detailing the status of the business is also helpful to include. Whether the planning process is relatively far along or still in the preliminary stages, it is good to be clear about where things stand.

The use of candor in a business plan will help remove emotion from the decision to launch a business or not. If the business plan takes a significant amount of time to complete, the context and progress in the planning process may need revisions and updates over time.

Business planning might not be the most appealing thing to do, but it is very important to the success of the venture. 

Business planning is the vehicle allowing dreams to come to fruition or at least establish whether those dreams can be used to turn a profit or not. 

There is nothing wrong with hobbies, but too often hobbies make bad businesses, and business ownership is rarely sustainable just as a hobby. When the desire to turn a hobby into a business venture arises, it is best to work through the planning process with consideration and diligence.

Jedidiah Hewlett is the University of Wyoming Extension educator serving Converse County. He can be reached at jhewlett@uwyo.edu or 307-358-2417.