Building an ISP Business Plan
   Part 1: The Basics

Whether you believe it or not, a well-wrought business plan is the foundation of any successful business. Building it is a big job, but the effort will pay handsome dividends down the line.

by Jason Zigmont
     HowToSell.net

You choose your destiny, and your business plan is your road map. As a service-provider operation progresses from being a BBS in someone's basement to becoming a profitable ISP business, you need to shift from thinking day-to-day to actually planning your future.

I've heard all the reasons why this isn't necessary. Here are of the some familiar arguments:

• "I'm too busy fighting fires to sit down and write a plan."
• "I've done fine with out a business plan before, what do I need one now?"
• "I do have a plan. I want to get a bunch of customers and sell out, why do I need to write it down?"

The concise answer to all these objections is that writing a business plan helps to guide your company and keep you focused. And without a business plan, you're far less likely to get funding. A complete business plan is the planning blueprint a growing ISP needs. A business plan will help you to make those hard decisions that inevitably come up, while keeping you focused on your overall goal.

Most ISPs suffer from a lack of focus. In nine out of ten cases, if you were to focus better and offer half of what you currently do, you will actually make more because of your focus. [You might want to take a look at my column, Focus. -JZ] A business plan makes you look at what you are truly good at and where you want to be. Even if you were never to look at the business plan again, just the exercise of writing out a business plan will make you more profitable.

Good/bad
Here's the good and bad news about business plans. Bad news—writing a complete business plan will take you at least 60 hours. Good news—writing a business plan will keep you focused and you will easily gain one to two hours out of each day.

Business plans may be used for either internal planning purposes or external purposes, such as raising capital, but no matter what you use your plan for, you need to write one. As you grow, most banks, angels, or venture capitalists will not even talk to you if you do not have a business plan. (Something I will go into in more detail in Article 5.)

Components
What goes into a complete business plan? Whether you're using the plan for internal purposes or for external ones, the essential parts are the same, only the focus may be different. Most business plans contain the following sections:

• Executive Summary
• Financing Proposal
• Business Description
• Industry Analysis
• Market Analysis and Sales Forecast
• Marketing Plan
• Operating Plan
• Organization Plan
• Financial Plan

While business plans are usually presented in this order, in the process of compiling the plan, you'll find that the Executive Summary, Financing Proposal, and Business Description are summaries of other sections and therefore should be done last.

Builder's blueprint
If the business plan is primarily for internal use, you should make sure that everyone in the organization understands that this plan will be the blueprint that will guide your business in the years to come—and that everyone buys into it. I truly believe that EVERYONE in your company should understand your business plan, since by understanding it they can tailor their work to advance your plan.

Every business plan should articulate goals—both for yourself and for the company as a whole—and employees who help to reach those goals should be rewarded. Rewarding employees based on your business plan goals will help keep you on track and focused.

This doesn't mean that your goals or plan can't change, but any changes should be well thought out, and the decision based on furthering your original business plan. Business plan details often change, but the core beliefs and vision rarely, if ever change.

Face to the financial world
If you plan to seek outside investment for your ISP, your business plan will be a large percentage of what you are judged on. It may well be the ONLY thing you are judged by. In any case, in dealing with banks, angels, venture capitalists, or anyone else looking to give you money, your business plan will be the point of departure.

If your business plan is not well written and well laid out, you're not likely to get a very positive response. Potential investors will attack your plan, probing for weaknesses anywhere they might exist, so your plan needs to be strong and you need to be prepared.

When developing a business plan for external purposes, you will inevitably focus more intently on the financial plan and the overall summaries, as those are usually the first to be read.

go to page 2: Rooted in reality