Creating your business plan 101
Most startups begin with envisioning an idea that moves the entrepreneur into action. The continued success of the business, however, comes from strategic planning. Creating your business plan at the beginning is your key to understanding your organizational goals.
Some people look at business plans from a financial perspective; many times I hear from potential clients that say “Write me a business plan so I can obtain funding.” Most say, “I don’t know how to write a business plan.” While this may be financially beneficial to me, I am here to tell you this is not true. You can create your business plan.
I want you to consider the following questions related to your business. If you can answer these questions, you are on your way to building a strong business plan. Your business plan can raise money for your business, allow you to make sound decisions; identify strengths and weaknesses and can be the key to ensuring short-term and long-term success.
I am excluding the financial components of the business plan. This will be covered in more detail in a future article.
1. What is your business?
True story; when I introduce myself to members of the nonprofit community, I immediately tell them I am a grant writer. For some reason, this occasionally leads to requests for me to assist in the annual bake sale drive and other fundraising activities. I have to inform potential clients I am a grant writer and not a baker or an event planner. Grant writing is my specific fundraising activity. I kindly tell them I am not interested in working on the annual bake sale, nor do I wish to coordinate the kissing booth at the bazaar. I will, (however), write about the bake sale and bazaar as a part of the grant proposal/application. Additionally I use the opportunity to briefly explain what I do in hopes of gaining a client. When writing about your business be very clear about your role and responsibilities. I will go into further detail about the Executive Summary near the end of this article.
2. What are the vision and mission and values of the company?
Your mission should be a concise statement that everyone in your business knows by heart. Your vision is your road-map; the direction your company is going; your goals. Your values reflect your organizations’ fundamental beliefs. What are your values? Some of my favorite values: commitment, dedication, respect, integrity, innovation.
I recommend reviewing successful mission and vision statements before formulating yours. Here is the link to Coca-Cola’s mission and vision and values as an example.
A mission and vision statement is not a slogan. Slogans are solely advertising tools that can change with the times (Coca-Cola slogans).
3. Who is your customer (target market)?
Who are you reaching today; who should be on your target list? What customer needs your product or service? Who have been your customers in the past (purchasing behaviors) and who will they be in the future? Be specific. It is not sufficient to say your customers, for example are women or men. Use descriptive facts; are they young or old; rich, poor or middle class? Where do they live (rural/urban)? The more you know about your customer the better chances you have of building a strong customer base and becoming financially solvent.
4. What do your customers value?
This is similar to your company values; the focus, however, is on what drives your customer to return to your business. Their values can determine whether they continue to support your business or your competitor(s). Things customers’ value: Satisfaction, Integrity, Quality and Quantity. It is imperative to your bottom line that you understand what your customers’ value. This can be done through surveys or simply asking for direct feedback.
5. What products and services do you provide?
Is this an original product? Do you have a patent? Are you offering the products or services your customer needs or wants? How do these products work? Are there gaps in what you’re offering? Are you offering products or services nobody wants, or perhaps nobody will want tomorrow?
6. What is your sales and marketing strategy?
Customers need to know what you offer; your priority is building your customer base and organizational brand. How do you drive customers to your site or storefront? Do you have a social media presence or are you throwing pamphlets out of a moving airplane? Do you have endorsements from professionals or influencers?
7. Who is your competition?
There are millions of cosmetic companies in the world but there is only one Rihanna (Fenty Beauty). What distinguishes you from your competition? Your direct competitors are the organizations that sell the same products and/or services as you. Which of your competitors are chasing the same target market, what are they doing and are they successful?
8. Who are your employees (human resource development)?
All organizations are built around qualified people in their respective positions; it is critical to the future growth of the organization. Consider all departments in the organization: leadership, inventory and project management, sales, production and finance. In a business plan the goal is growth, therefore you need to consider this for the future. Also consider the amount of time and expense it takes to ensure your employees are on-board with your organizational goals.
9. How will you measure your success?
Performance is a fundamental concept in business planning. Traditionally success is measured by financial returns and growth. Organizations must also track data about quality, customer needs, delivery times (if applicable) and other non-financial information that often is foretelling of financial results.
10. What is your exit strategy?
Every company needs to ask this question. Wikipedia defines an exit strategy as, a means of leaving one’s current situation, either after a predetermined objective has been achieved, justifying premises or decision makers for any given operational planning changed substantially, or as a strategy to mitigate imminent or possible failure. Keep in mind this is not solely about ending your business. This is applicable to any employee, product or service changes.
11. What are your short and long-term goals?
Goal setting is an important tool in achieving the success you want. In business, there is an acronym for goal setting: Your goals must be SMART, which means Specific, Measurable, Attainable, Realistic and Timely. Addressing long and short term goals in your business plan allows the reader to have a clear understanding of your organizational intentions.
12. What makes you unique?
Original ideas are “few and far between”. If you have an original idea or concept, great! If not, you need to consider what stands you apart from the competition. Do you offer quality for a lower price? This is where you may create your slogan. Is it convenient (Domino’s Pizza “30 minutes or less”)? Do you have exceptional Customer Service (“Like a good neighbor State Farm is There”)? Creativity (3M: Innovation.). Quality (Ford Motor Company “Quality is job one”). Potential investors often ask this question; are you prepared to answer it?
The Executive Summary
If you are able to answer these questions you have just created a large portion of your business plan. This is also the template to create your executive summary. Your executive summary is always the first item on your business plan but should always be the last thing written as it is a culmination of all of your intentions. The executive summary can also help you become better at telling your story via the elevator pitch.
Your business plan should be an ever evolving document. As the saying goes: “The only constant is change”. Your business plan is the best way to evaluate your strengths and weakness; which can lead you to improvement and financial success.
