Wells Fargo is now providing business planning and startup advice here. This is interesting for a few reasons:

The advice is fairly comprehensive and spans a variety of topics. The site includes a business planning tool. Their business planning advice includes discussions of competitive advantage, financial statements, and cash flow (which are topics that I have always considered to be important).

In the past, banks have not always provided this type of advice due to time, resource, or expertise constraints or due to potential lender liability.

This site affirms that the business plan is still considered important by a potential financing source.

Ken Pirok


The Ken Pirok Business Model (or Business Plan Outline or the Six C’s)

Introduction and Executive Summary (including financing requests)
Internal Aspects
Strengths and Weaknesses
Business Ownership
Board of Directors
Key Employees and Managers
Management Structure/Organizational Chart
Management Succession Plans
Research and Development
Systems and Technology
Location and Local Market Analysis

Competitive Advantage:
Mission and Vision Statements (What do you do differently or better?)
Value Proposition

Product/Service Descriptions
Product/Service Life Cycle
Target Market
Market Size
Market Share
Revenues and Sales Goals (built from the bottom up)
Customers/Clients and Payment Terms
Bargaining Power of Customers
Consumer or End-User (may differ from customer)
Concentrations of Sales
Cyclical Nature of Business

Labor Unions
Strategic Partners
Financiers and Specific Requests for Financing and Proposed Use of Funds
Bargaining Power of Suppliers, Supplier Concentration
Board of Advisors

Cash Flow:
Financial Statements
Breakeven Analysis

External Aspects
Threats and Opportunities
Industry Analysis
Barriers to Entry
List of Major Competitors (including their competitive advantages, strengths, and weaknesses)
Intensity of Rivalry and Price Competition

The Business Model Canvas

The Business Model Canvas is a framework that is used by many of today’s internet and technology startups. This is perhaps the best-known business model that is purported to replace the business plan. The book, Business Model Generation, by Alex Osterwalder & Yves Pigneur presents the visual canvas and also describes the elements within each of the nine major categories of the canvas. Alex Osterwalder also has a blog called Business Model Alchemist.

I generally like the Business Model Canvas. It is simple, yet it encompasses many of the most important factors involved in planning a successful business. It enhances the entrepreneur’s ability to communicate these factors to others, and it does seem especially valuable to tech startups.

But, it’s not perfect. One of my faults with this model is that it does not directly address competition or substitute products or services. It also fails to directly illustrate the businesses unique competitive advantage; although, the “value proposition” category is certainly a big piece of it.

This template actually inspired me to develop my own business model. I will reveal my model in a subsequent post.

Ken Pirok

Questions to answer before you start planning your business

Are you thinking about starting a business? What does it take to get a business off the ground? Have you started writing a business plan? Do you have what it takes? Before you go any further, here are some questions you should ask yourself:

What are the main reasons you want to be in business?

Bad reasons for going into business typically include wanting to spend more time with your family or thinking that you will get rich quick. The fact is that starting a business is a lot of work, and building a successful business takes time-months and years. The fact that you cannot get along with your boss is not a good reason either. In business, you will have to work with people all the time, and even when you are the owner, the customer is still basically your boss.

The best reason to start a business is that you have a great idea; that is, you have some way to do things differently or better than the others. Another good reason is that you want to be the person in control of your income. If you expect a huge amount of hard work, and if you expect to receive the financial benefits of these efforts, then being an entrepreneur may be for you. If these are your thoughts about starting a business, then read on…

What type of business are you interested in operating?

Your business should consist of something that you are good at and something you will enjoy. You will be spending a lot of time on it; your business will become your livelihood. You might as well enjoy it, and you better be good at it.

The first businesses people often think of starting are restaurants, bars, salons, retail stores, and entertainment and recreation businesses. These businesses are risky, and they are among the most likely to fail. For this reason, they are very difficult to finance; most banks won’t touch them.

Such businesses are risky because they require significant up-front expenditure for equipment, because they are subject to people’s ever-changing tastes, because they are cash businesses subject to employee (or owner) theft, and because, contrary to popular belief, they require significant experience before you can run them properly. These types of businesses should be at the bottom of your list, unless you have experience in the industry, a really good idea, and your own money to try the idea.

Who will be your customers?

Who will pay for your products or services? How will you attract them? Depending upon your type of business, you should already be able to name exactly who some of your customers will be.

Who will be your competitors?

If you don’t think you have competition, think again. Every business has competition, both direct and indirect-from sources you may not have even considered. You must be able identify exactly who and where your competitors are before you get into business.

What will be your competitive advantage?

What exactly will you do differently or better than your competition? How does your product or service benefit your customers? This is the entire basis for your business and your business plan, and the answer to this question makes or breaks your business. The right answer represents a great opportunity, waiting for you. But, if you cannot come up with a strong competitive advantage and be able to communicate it effectively, you will probably not even get a business started at all.

Will you offer lower prices than your competition? If your answer is “yes,” then think again. This is an extremely difficult strategy for a newcomer to pull off.

What are your personal strengths?

Do you have experience in the industry? This is an absolute must. To be successful, you do not necessarily need to be an expert in business. Instead, you should be an expert in providing some special sort of product or service. You can hire professional help, but there’s no substitute for providing a great product.

What are your limitations?

Are you prepared to be responsible for attracting customers and for ensuring that the business makes money? Are you prepared to pay your bills if the business is not profitable or in the likely event that it takes months (or even years) longer than you expect to become profitable? Are you prepared to work longer hours and to work outside of the typical eight to five workday? Are you organized?

How will you overcome these limitations?

Can you afford employees and professionals to perform the duties that you cannot? Are you willing and able to delegate responsibility? How do you deal with stress? Do you have a business plan? Are you ready to get started now?

There is truly something magical about owning a business. Your business stirs a pride in ownership that is difficult to replicate by any other means. The feelings become even deeper as you create a team and satisfy customers as well as provide financial security and career advancement to employees. But, if you are going to be successful, you must first think and research and plan. It takes a special person to write a business plan and then to put it all together, to implement it, to make it happen, and to make it work. It takes responsibility and self-discipline.

At the same time, you may very well have the opportunity of a lifetime. You will ultimately be responsible for all of your successes and failures. Planning and effort are required, but your hard work will be rewarded with financial success. That is part of the magic. Business ownership takes a lot of hard work, but the rewards can make every ounce of effort worth it.