Why you need a business plan, by Noel Osborne

By Noel Osborne, Osborne & Associates

Many small business owners do not understand why they need a business plan, and I would suggest that many boat dealers fall into this category. The fact is that a comprehensive business plan is much more than a financial plan.

A well-written business plan will read like a novel. There is a plot to it, and that plot is the story of how you intend to become successful at selling and servicing boats over a long period of time. Yes, most of the detailed financial planning should address the next year of your operations, but focusing on simply one year might prove to be less than fruitful — any business that hopes to be successful must have a long-range plan in place, as well.

Also the hardest hitting portion of your plan should be in narrative form that is backed up with charts and graphs. Your plan should be convincing to any lenders or suppliers that may be interested in doing business with your dealership in the future. In this regard, you must assume that the reader possibly knows very little about your dealership and therefore must be educated in all aspects of it so that they can make intelligent decisions as to whether they want to do business with you. (Currently, our industry is hoping to attract more mainstream bankers, and all they know about us is what they read in the financial papers or see on television which does not bode well for us.)

I recommend that you start with a section that explains why you are in the boat business. Why do you envision that there is a profitable future in the marine industry? Explain how you intend to position your dealership so that it will be profitable and grow in the future.

Devote a section on the brand you have created or hope to create. State why you selected the brands (manufacturers) you selected and explain how you intend to service their products to support your own overall brand beliefs.

Carefully explain what your competitive advantages are. Remember that your competitive advantages are what differentiates you from the rest of the pack. As Jack Welch, the former chairman and CEO of GE once said: “If you don’t have a competitive advantage, don’t compete.” Anyone lending you money will certainly want to know how you intend to outperform your competition, and your competitive advantages will help you make that happen.

You should also devote a section to the history of your dealership. This section should give the reader a general overview of your dealership from the inception of your dealership to the present day. You should address your growth, any expansions you have done, any significant changes you have made and why you made them and any other subject that would be of interest.

Your most valuable asset should be your team, and you should address who they are, along with their value, their years of experience, and how long they have been part of your team. Don’t be afraid to brag about your employees.

Everybody knows that our business environment has been challenging, to say the least, over the past couple of years. Admitting and addressing that topic will lend you a good deal of credibility if you can outline what those challenges have been along with what you have done to address them.

Your projections for the coming year should be based primarily on your performance over the past year. Explain what has worked and what has not worked. Hopefully you have detailed monthly performance results on last year’s sales, gross profits, and operating costs. Show, in detail, how you projected next year’s results utilizing your monthly P&L’s from the prior year as a starting point.

Cash flow is probably our most critical subject. If you run out of money in the middle of the winter you need to explain how you intend to make it through these difficult times. You should show your cumulative cash flow in chart form.

Lastly I suggest that a well-written business plan should include a marketing section that shows in detail where you are going to spend your marketing dollars by month along with the reason you selected each marketing venue.

If you need some help or guidance on your plan call us at 239-594-8873.