By Karen E. Klein Q: I'm interested in starting a boarding kennel, but I've never operated my own business. Do you have any recommendations for getting started on my business plan?
---- R.D., Calif..
A: Business plans are written for a variety of reasons. These include providing a blueprint for your internal operations, as a requirement for obtaining external financing (either debt or equity), as a map to point your company toward fast growth, and as a strategy manual for expanding into new markets. They can even be a means of helping to sell a business.
While the most common reason for drafting a business plan is to obtain funding, experts recommend that every would-be entrepreneur go through the discipline of putting pen to paper, even if outside funding won't be immediately required. The benefits that make it worth the time and trouble: learning about your business in general by laying out specific plans and goals for its future.
BASIC QUESTIONS. Before you start on the plan, however, you should do a feasibility study to determine whether a boarding kennel will fill a needed market niche -- an essential prerequisite if your idea is ever to blossom into a money-making proposition. If you determine that the idea is feasible, you can begin the comprehensive research you'll need to write a business plan. For instance, make it your business to find out about the market: How many dogs are in your area, and how far will someone drive to board a dog? Is the local dog population growing or shrinking, and to what degree? Are there other kennels in your area that will compete with you? Are they booked solid, or are they going begging for customers? What's the average length of stay?
Also, you need to think about such things as: What are the zoning regulations and city fees for kennels? What is the competitive rate for boarding a dog? How much does it cost to feed and care for a dog staying in the kennel?
Barbara Lewis, a business-plan consultant with Los Angeles-based Centurion Consulting Group, says her firm conducted a survey last year among venture capitalists, asking them to identify the areas that are most often deficient in the business plans they reviewed. "The No. 1 response was management, because most businesses lack the people they need to become successful," Lewis says. "The second-biggest deficient area was market analysis. New owners often are not realistic about their market size and the demand for their products or services, and they don't take the time to research the market."
Before Lewis and her colleagues help entrepreneurs write their business plans, they make sure they hear affirmative answers to a pair of basic questions: Is the market large and growing? Is the market profitable?
HONESTY PAYS. If you can't answer both of those questions with a realistic and enthusiastic "yes," then spare yourself the time and energy of writing a business plan. If you can answer positively after doing some basic investigating, then you're ready to start researching your business plan.
There are many guides to business-plan writing, templates that will help you with the financials, and books that will give you tips and advice. Lewis recommends How to Really Create a Successful Business Plan (Thomson Learning, 1996) by David E. Gumpert.
Online examples of business plans, book suggestions, and research guidance can be found at the Small Business Administration's Web site, the American Express Small Business Advisor, and Bplans.com. Good luck. Have a question about running your business? Ask our small-business experts. Send us an e-mail at email@example.com, or write to Smart Answers, BW Online, 6th Floor, 2 Penn Plaza, New York, NY 10121. Please include your real name and phone number in case we need more information; only your initials and city will be printed. Because of the volume of mail, we won't be able to respond to all questions personally.