Your business plan is an essential part of your small business success strategy. It is a vital document that lays out all of your professional goals and the means by which you intend to achieve them. It is what brings your business out of the concept phase and turns it into an actionable reality.
It is very important that you write a business plan for your own small business. With it, you can focus your ideas into realistic techniques and achievable, but not too unchallenging, goals. Your business plan is what will keep you on track and motivated throughout the growth of your business.
Furthermore, business plans are commonly required by investors, banks, the government, and other lending institutions from which you will be requesting financing to help to get things off the ground.
There are certain steps you need to take in order to write your business plan. These are:
· Identification and narrowing down of all of your business objectives
· Thoroughly researching all the different points within the business plan
· Write out a rough first draft of the business plan
· Go over the rough draft and divide it into key sections
· Apply realistic financial projections for the plan
· Obtain feedback regarding all the elements of the business plan.
The elements of your business plan should consist of the following:
· Vision – answer the question “Why am I creating this company?”
· Mission – answer the question “What benefits will my products or services provide to my customers?”
· Goals – answer the question “What are the short-term and long-term goals of the company?”
· Introduction to your business – examine and discuss the following points:
Þ An overview of the industry of your business, your business history, and its operations strategy.
Þ An introduction of the key people on your team.
Þ Your current market, including its size, the opportunities you have, the challenges you face, and the growth pattern.
Þ Competition and alliances, including strengths and weaknesses, and strategies.
Þ Target market.
Þ Identification of your clients in terms of their needs, demographics, and purchasing habits.
Þ Your products and services as well as their revenue streams.
Þ The image, experience, or lifestyle you’re selling
Þ Placement
Þ Where your product or service will be available for purchase
Þ Pricing
Þ Your promotional strategy
· Operations – including its functioning involving the following points:
Þ What the business will accomplish everyday.
Þ Current and future projects in the works.
Þ Successes and challenges faced so far.
Þ Overall strengths and weaknesses of the business
Þ Internal operations issues
· The Team – including the people who will be working together in your business, covering the following points:
Þ Who is responsible for what?
Þ Is there the right number of people in your business for getting the job done?
Þ Strengths and weaknesses
Þ Internal successes and challenges
· STEP – also known as the external analysis. This includes:
Þ What trends are affecting your business in the following areas: social, technological, economical, and political.
· Opportunities – what is available to your business regarding the following points:
Þ The size of your prospective market
Þ How much growth opportunity your business has
Þ Your market niche
Þ Changes in operations
Þ The structure that would be required in order to allow for growth
Þ Concise statements of opportunities for your business
· Plan of action and strategy – including:
Þ What does your business require for achieving its long-term goals?
Þ What challenges does your business face before reaching its long-term goals?
Þ What actions will you take in order to achieve your business goals?
Þ Why have those actions been chosen? How do they complement your vision?
· Assumptions – examine these points:
Þ List all of the assumptions that have been made within the writing of your business plan.
Þ List soft assumptions – that is, those that have been made but which are not quantifiable.
Þ List hard assumptions – those that are quantifiable.
· Financial projections – including:
Þ Cash flow statements from the past two years through until the next two years.
Þ Income statements from the past two years through until the next two years.
Þ Balance sheet from the past two years through until the next two years.
Þ Create each of these statements with a high, medium, and low sales estimate.
· Executive summary – this section should be written as following:
Þ A summary of your business plan
Þ This section’s size should consist of approximately 10 to 15 percent of your entire business plan.
Þ This section should always appear at the end of the document
Þ Key points should be highlighted
Þ Consider this section the most important of the entire document.
As you can see, a business plan requires a great deal of work and planning, however, it is likely to be the most important document that you will create throughout the entire life of your business. Therefore, it is well worth doing, and doing well.
Robert Moment is an innovative, sought-after small business coach and author of Invisible Profits: The Power of Exceptional Customer Service. Robert specializes in teaching entrepreneurs and small business owners how to start a small business which profits and grows. Visit How to Start Your Small Business, and sign-up for the FREE 7 Day e-course “Turn Your Passion into Profits: Small Business Startup.”
