Whenever I see one of these pitches, I laugh because there isn’t a quick-fix magic pill solution to developing a business plan. Many entrepreneurs want to outsource this task because they don’t feel they have the expertise or the time. However, the best business plans I have seen are more straightforward, shorter documents that look and feel like the owner wrote them personally. Somehow, the passion, energy, and insight are much more potent than a prepacked fancy-format soul-less document that seems ubiquitous.
The first tip for you is to decide what you want to do for a business plan. Many entrepreneurs think that they need a business plan so that they can get funding. While this is a legitimate reason for many:
“I strongly believe that the business plan is a foundational document that you need to personally write to gain clarity about what you are trying to accomplish. Said another way, taking the time to write your story is much more for you than others.”
The order I am listing is where you should write your plan. By working in this sequence, you will find it easier to shape the overall document. You can reorder them later to make them easier to read and understand.
Current Business Situation: This is the first step. Include your strengths, weaknesses, opportunities, and threats. Include significant achievements, patents, prototypes, awards, contracts, locations, etc. Describe objectively why you have been successful. Clearly state why anyone would invest in your business, buy from your company, or join your team.
Market Analysis: Research and portray, using specific numbers, the market size you are in. Explain the potential and identify your competitors. You won’t get much attention from anyone until you objectively show how your business fits and will excel in the marketplace.
Marketing Plan: This step is complex and requires much thought and work. A well-thought-out marketing plan is the cornerstone of clarity. Most business owners underestimate how vital a clear marketing plan is to success. Write out the purpose of your marketing, how it will be executed, a particular target market, and who you aren’t targeting. Painstakingly scribe your unique selling proposition and business identity, focusing on your “why.”
Mission Statement: This is your high-level statement to your customers about what your business does. This defines who you are and what you intend to do. Don’t underestimate the power of a mission, vision, and cultural statement. These will become the touchstones of your business in the future.
Vision Statement: This is a focused message to your team. Write out what your business will become in the future. Be descriptive and aspirational about the final result.
Points of Culture: In developing your business plan, this section is about how you and your people will act and what you will stand for. This should be aimed at your team and your customers. I have seen some outstanding “pledges” that are point-of-culture statements.
Business Strategy: Convince your audience (and yourself) about your goals and how. Be very specific and write more than you want to. You can edit this down later. Remember, this is to help you figure out your strategy first. Many businesses fail because the approach is flawed and the marketplace is misunderstood.
Financial Features: I recommend that this section in developing a business plan is about numerically identifying specific key performance measurements. How will you know if you are succeeding, and what will the results look like? Include sales, leads, average sale, conversion rates, gross margins, profit, trends, and expectations.
Financial Requirements: Consider this section the budget or believable and achievable financial model that is compelling enough for you to invest your money in the business. This should include a P&L, a capex forecast, funding needs and sources, use of funds, etc.
If you devote time to completing these sections when developing a business plan, you will have the 80% solution of a final document you can make pretty soon. These are tough to write but critical. Remember, developing a business plan forces you to perform the foundational essential thinking steps for long-term success. The most successful businesses synchronize their quarterly plan and the business plan regularly. Future investors can wait until you get it right; I know you will.
If you want to learn more about the critical responsibilities of a business owner, click on the tab for my complimentary ebook.
I wish you success!
Coach Dave
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