Successful Business Planning
You know the saying. “A failure to plan is a plan to fail.”
The adage is especially true for entrepreneurs and small business owners. Without a solid roadmap for your business, you’re likely to end up in uncharted waters facing serious challenges.
A well-rounded small business plan positions your business for success. It can help you anticipate challenges and put measures in place to overcome them.
Plans can be long or short, simple or complex. Regardless of the type of plan you choose, there are seven important things to include in any small business plan.
1. Executive Summary
The executive summary will be the first thing most people read when reviewing your business plan. An effective executive summary will lay out all the most important information about your business, typically following a ‘Problem-Solution’ or ‘Fill-in-the-blanks’ format.
- For (target customers)
- Who are frustrated by (problem/current solutions)
- Our (product or service) solves (customer problem)
While the executive summary typically comes first in the plan, many entrepreneurs choose to wait and write this section last. That way you can condense the most important ideas from the other sections into the summary.
2. Company Description
Your company description is just that. It’s a high-level view of your business that explains who you are, how you operate, and what your goals are.
This section should include information such as:
- Your mission statement or the ‘Why’ driving your organization
- The legal structure of your business (corporation, partnership, etc.)
- A summary of short and long-term business goals along with how you plan to make a profit
You’ll want to review your mission statement often to make sure it continues to align with your business as the business evolves. Keeping the statement current will help your business maintain credibility, since a statement that doesn’t align with your core values or key services can undermine your marketing efforts and credibility.
3. Products and Services
In this section you’ll want to describe exactly what you’re selling, with a focus on customer benefits.
Your products and services section should make note of vendors and suppliers, product or service costs, and more. You’ll also want to include any relevant copyright or patent data in this section.
4. Market Analysis
Research, research, and research some more! A well-rounded business plan should demonstrate that you have a solid understanding of your target market and demographics.
Target markets are also known as customer personas. You’ll want to identify demographic information such as:
- Other relevant info
5. Strategy and Implementation
Anyone reviewing your business plan will want to understand your go to market strategy, or how you plan to obtain customers. In this section you should make note of your sales and marketing strategy and how you’ll implement these strategies within an operating plan.
Describe things such as:
- How you will promote your business to customers
- How you will position yourself in your market and differentiate your business from competition
- Any relevant information about promotions, pricing, distribution and logistics
6. Organization and Management Team
Your business is only as good as the team managing it. Identify team members, their areas of expertise, and relevant qualifications or experiences.
It’s also worth mentioning the roles you still need to hire for or foresee the need to hire for in the near future. Identifying the costs associated with recruiting and hiring these team members is also worth including.
If your organization will have a board of directors, be sure to make note of that body and identify any existing board members in this section.
7. Financial Plan and Projections
Words are great, but numbers tell the real story of any business. Every business plan ought to include a well-developed financial section to outline costs, margins, sales, and other relevant information.
If your company is just starting out you may not have much in the way of financial statements or reporting. In this case you will still need to prepare a budget.
If your company has been around for a while, aim to include at least three years of financial data. Be sure to include:
- Income statements
- Profit and loss statements
- Cash flow statements
- Balance sheets
Other figures to consider including are:
- How much of your revenue is retained as net income
- Ratio of liquidity to debt repayment ability
- How often you collect on your invoices
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Contact us today to learn more about how we can help with business planning, financial projections, feasibility studies, and more.