11th Aug 2008
Why Business Plans Fail to Persuade - A MUST READ Article
I just saw a great article by a business funding expert, discussing the reasons why business plans fail.
Some of these failings I have been talking about with classes for many years. In particular:
* Value Inflation - Many DC grads have an over-inflated idea of their value to society. Just because you think chiropractic is wonderful, doesn’t mean others will too. You must PROVE your value by providing care that relieves pan and through outstanding customer service. Don’t toot your own horn until you have something to toot about.
* “We have no competition.” Yes, you do; it’s every other chiropractor in your community, in addition to orthopedic doctors, physical therapists, and osteopaths. This statement shows an ignorance about the basics of business that turns off banks and lenders. Until you can prove to prospective patients that your practice is valuable to them (see item 1), you are just like any other chiropractor. People who don’t know chiropractic don’t know the difference between NUCCA and Gonstead.
*Trying to be all things to all people. I know when you start out, you want to take everyone. But you need to more specifically define your market. What kind of patients are you really looking for? What do they look like? What kind of care do they want that you can provide? Limiting your market actually brings you MORE people rather than fewer. Trust me on this; I’ve seen it work many times. If you don’t define your market very tightly, no one will know they are supposed to come to your office.
* Unrealistic financials. I see lots of business plans with very high income projections and minimal expenses. Back way off on the income projections. Even if you think you can start out with an income of $10,000 plus a month, the bank won’t believe you. And be sure to put all possible expenses in your cash flow listing. Put a large amount in Miscellaneous (at least $500 to $1000 a month). Remember Murray’s rule: Over-estimate expenses and under-estimate income. And you’ll be about half right.
* Forgetting Cash. Speaking of cash, understand the difference between cash and profits. Just because you bill it, doesn’t mean it wil be collected. You must manage collections to bring in the money you need to pay your bills. If you bill $10,000 a month and you only collect $5000, you may not have enough to pay expenses. This is the place where I lecture on keeping down expenses (but I’ll save that for another blog post).
In conclusion, read the About.com article carefully and follw what he says. If you follow the ideas in this article, it could mean the difference between getting your loan accepted or not.
I just saw a great article by a business funding expert, discussing the reasons why business plans fail.
Some of these failings I have been talking about with classes for many years. In particular:
* Value Inflation - Many DC grads have an over-inflated idea of their value to society. Just because you think chiropractic is wonderful, doesn’t mean others will too. You must PROVE your value by providing care that relieves pan and through outstanding customer service. Don’t toot your own horn until you have something to toot about.
* “We have no competition.” Yes, you do; it’s every other chiropractor in your community, in addition to orthopedic doctors, physical therapists, and osteopaths. This statement shows an ignorance about the basics of business that turns off banks and lenders. Until you can prove to prospective patients that your practice is valuable to them (see item 1), you are just like any other chiropractor. People who don’t know chiropractic don’t know the difference between NUCCA and Gonstead.
*Trying to be all things to all people. I know when you start out, you want to take everyone. But you need to more specifically define your market. What kind of patients are you really looking for? What do they look like? What kind of care do they want that you can provide? Limiting your market actually brings you MORE people rather than fewer. Trust me on this; I’ve seen it work many times. If you don’t define your market very tightly, no one will know they are supposed to come to your office.
* Unrealistic financials. I see lots of business plans with very high income projections and minimal expenses. Back way off on the income projections. Even if you think you can start out with an income of $10,000 plus a month, the bank won’t believe you. And be sure to put all possible expenses in your cash flow listing. Put a large amount in Miscellaneous (at least $500 to $1000 a month). Remember Murray’s rule: Over-estimate expenses and under-estimate income. And you’ll be about half right.
* Forgetting Cash. Speaking of cash, understand the difference between cash and profits. Just because you bill it, doesn’t mean it wil be collected. You must manage collections to bring in the money you need to pay your bills. If you bill $10,000 a month and you only collect $5000, you may not have enough to pay expenses. This is the place where I lecture on keeping down expenses (but I’ll save that for another blog post).
In conclusion, read the About.com article carefully and follw what he says. If you follow the ideas in this article, it could mean the difference between getting your loan accepted or not.
Posted in chiropractic as a profession, Business Plans for Practice Startup, startup financing, getting ready to practice, financial questions, startup experiences | No Comments »

