You may have heard this quote before . . . “A failure to plan is a plan for failure.” I’m not sure who said it but in my experience I believe it is a very true statement. So when was the last time you sat down and put together your business plan? And if you have a business plan when did you last dust it off and see whether you are on target and achieving the results you expected? I’m sure many of you are saying to yourself, “I don’t have a business plan,” or maybe “why do I need one?” Well, you wouldn’t start a trip from here to, let’s say, San Francisco, without looking at a map and determining what route you might take, would you? Worse yet, would you ever start driving without even knowing that San Francisco was your destination? How successful do you think you would be? How would you start? How would you know that mid way through your trip . . . you are midway through your trip? I think you get my point.
So what should you consider when developing your business plan? Here is a simply outline and a brief description of what you need to look at.
Mission Statement — A mission statement is simply an explanation of why you are in business. What do you want to accomplish and how would you communicate this to customers, venders, employees and maybe investors? Your mission statement should be clear and succinct.
Company Summary — This should describe the ownership of the company and a description of the type of entity it is (LLC, S Corp, private vs. public, etc). Is it a start up or an existing business? If it is a start up you should describe the start up process and summarize the start up costs. If it is an existing business you may want to provide a brief history of the company. You also may want to include what some of the keys to success are that will make the difference between success and failure.
Service/Product —Here you want to describe what your services and/or products are. What are the benefits and who will use them. How will you deliver your services or produce your products?
Market Analysis —This will require you to do some research to determine your market. Who are you targeting? Is that market growing or shrinking? What are the characteristics of the market? For example, are you targeting consumers? What age group? Male or female? What geography? What are their tendencies?
Strategy and Implementation — This would include a completive analysis. Who will be your competitors and what do they do to market their products and services. This section will also include your marketing strategy. What makes your business unique? How will you reach your target market? You should also include a sales strategy. Will you have a sales team? How will you close sales transactions? You should also include key milestones for the implementation of the business.
Management Summary — You will describe how your business will be organized. Who will be managing it? What are their qualifications? How will your team be organized? When will your team be in place and how will you recruit the right people?
Financial Summary — Here you want to project you financial results at least for the next year, preferably for the next three years. You will need to project estimates for sales and expenses. Include your start up costs, if it is a start up. You will need to define assets required and the costs associated with them and if you plan on incurring any debt. You may want to include a break even analysis and a cash flow forecast in this section as well.
This outline is pretty basic and can be expanded depending on how complicated or large your business is. It doesn’t need to be too sophisticated if you are using it for yourself and your employees. But if you plan on taking this to a financial institution to help in financing your business it should be done professionally. There are many versions of software out there that can help you put your plan together. Just check the Internet.
And, once it is completed, don’t just put it on the bookshelf to collect dust. Share it with employees and others who will be helping you achieve the results in the plan. And review it periodically to see how you are doing. You may find you will need to adjust the plan because of unforeseen factors. It should be a living document.
And to close with another quote “plan your work then work your plan.” Happy planning!