MARCH 2000
A Firm Plan: Business plans are critical to your firm's success
A business plan takes a snapshot of your firm's financial and strategic positions and outlines your foreseeable prospects over a specific period of time. A viable business plan is critical to the success of your firm and serves the following functions:
- It is the vehicle for management to develop and focus ideas for growing the business;
- It establishes a roadmap for management; and
- It is a benchmark for progress against identified goals
Your plan should begin with your present business situation. Use assumptions about the market in which your firm exists to define a strategic course of action. Keep in mind that your plan is a document that reflects current business decisions and is a guide for future action; however, do not expect it to shape the exact course your business will follow. A business plan must be flexible to be viable and should contain many, if not all, of the following categories:
- The industry, the company, and your product: Prepare this section to allow a client to understand how your firm fits within the industry.
- Market research and analysis: Identify and discuss targeted clients, the size of the market and the niche you will capture, the trends in market growth and how your firm will capitalize on these trends, the identity and strength of competing firms, estimated market share and a workable rationale for capturing that share, and a plan for continued market evaluation.
- Marketing plan: Define your overall marketing strategy, including pricing and promotion, and outline a basic advertising and promotional program for the immediate future.
- Management: Discuss compensation and ownership issues, including plans for stock ownership or other equity or equity-like incentive programs.
- Critical path: Discuss the timing and interrelationship of major events necessary to move your firm forward and achieve your goals.
- Risk factors: Outline foreseeable risks to the success of the firm, and quantify them to the extent possible.
- Financial plan: Represent your firm's best estimate of the financial results of future operations through a set of very detailed five-year financial projections that show the financial viability of the business. Include a five-year pro forma of profit and loss, cash flow, year-end balance sheets, and a schedule showing cumulative cash requirements and surpluses. Your projections should contain a detailed list of assumptions that justify every number in the financial analysis.
Finally, while there are numerous resources, including websites, books, and software programs to help you prepare your plan, nothing can substitute for dynamic planning and insightful deliberation into defining who you are, what you want your business to be, and what must be done to get there. These fundamental decisions will become the basis upon which your firm will be built.
Excerpted from "Getting to Point B" by Harry Henning, Business Law Today, Nov/Dec 1995.
READY RESOURCES
How to Start and Build a Law Practice. 1999. ABA Law Practice Management Section.
PC #511-0415, softcover; PC #511-0414, hardcover. Focusing on Clients: A Detailed Guide to Planning, Positioning, Cross-Selling, Networking, Engaging New Clients, and Other Strategies for Growth. 1990. ABA General Practice, Solo and Small Firm (GPSSF) Section. PC #515-0208.
To order call 800/285-2111.
 
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