“Sears was the first major U.S. retailer to go public, raising $40 million. That was 1906. On Monday, 112 years later, Sears’ value was hovering around $44 million.” – NBC News
Business plans are one of the easiest yet tricky documents to create. After being introduced to how to draft this essential document and the best practices implemented in the industry, you’re ready to learn a few tricks to ensure an accurate and comprehensive plan. The following tips you’re about to learn are the expert advice of professional businessmen. So heed and implement them to ensure your success.
Cover Only What’s Important
There is no such thing as perfection; however the effort made for being as perfect as possible is an ongoing process. In the case of a business plan, you need to understand that it can never be perfect as well. Due to changing demographics of consumers and markets, it is quite obvious that the business will need to adapt. Therefore, tweaking your business plan along the way is the best way to stay on top.
Remember that the Essential Aspects are Focal Points
A business plan is based on three building blocks: analysis, action plan and projections. These three are the focal point of any business plan. Ensuring that you are up to date with these commodities will ensure that the business does well.
Research is Vital; Indulge in it
The survival of a business is dependent on the amount of research conducted throughout. The amount of research being collected should never halt. Keeping track of consumers and the competition will provide an ideal to which a business can strive towards. Learning the ins and outs of the industry will save a lot of time and trouble. These details come in handy when making important decisions that could affect a company exponentially.
Learn from Experience
One of the most basic ideals that a company should strive for is learning from its experiences. Whether you are learning from your mistakes or adjusting strategies based on past successful attempts, learning should be encouraged at all times.
After reading through this article, you now have a clear idea on how rigorous the task of drafting a business plan actually is. However following these steps and guidelines will surely provide the required assistance to overcome any confusion thus leading to the creation of a successful business plan.
Note: This is the second of a three part series to educate business people on the basics, best practices and tricks of writing business plans. You can find Part I here.
By creating a business plan, you will be ensuring clarity and transparency at all levels long before the start of your business. However, just drafting a document based on its components isn’t enough; you need to know the best practices of creating business plans, especially if you’re sharing them with an investor. So, read on to continue your education on how to create business plans.
Keep it Simple!
How can such complicated data be portrayed in a way that is understandable to all? Rather than using jargon and terms that make no sense, keep the language simple. Such plans are an essential commodity to a business, so ensure that they’re easier to understand and comprehend. However, for certain ideas, this task is even more difficult to accomplish. Therefore, tread carefully and follow these tips.
- Explore difficulties and opportunities thoroughly. Your business plan will only be great if you consider all scenarios and obstacles.
- Prioritize the solutions for the problems at hand.
- List the solutions your business offers in terms of the desired outcome.
Define Roles for Every Task
For each action allocated, there needs to be a person responsible. This division of labor will make sure that each owner acts according to the guidelines and milestones set within the desired time period. Since everyone is on board the process, the tasks will grow less strenuous.
Create a Credible Statement of Goals and Objectives
Since goals drive all business activities, they can also be considered as a motivational tool for employees. Therefore, those you set should be broad and not limited in any way. However, while doing so, ensure that your objectives are quite specific.
Provide a Convincing “Reason for Being”
You need to give a clear picture of why and how the business has come to be. Clarifying this and justifying it through facts and figures will make the process simple in the long run. Besides, it can help inspire your staff once the company sets its roots.
Include a Thorough Market Analysis
Analyzing the competition and how to respond to the market will help you measure how successful the business can be. Looking at strengths and weaknesses of competitors and positioning oneself against them is an excellent way of being specific and effective.
Since business plans are more of a blueprint for a business, nothing should ever be left to chance. Taking such steps will help ensure the viability of your business. To further leave no stone unturned, the final and third installment will discuss some tips.
Note: This is the first of a three part series to educate business people on the basics, best practices and tricks of writing business plans.
It is a universally accepted fact that a business plan should exist long before the business itself. However there are those who jump into a venture without this essential document, causing their businesses to meet their ends before they flourish. If you haven’t developed your own business plan, you probably aren’t aware of what you’re missing. From defining your business objectives to determining a strategy to achieve them and all the way to testing new ideas and projects, your business plan can do it all.
If this motivates you to go ahead and draft your own business plan, this series is for you. To start you off on the right path, this installment will go over the main elements your business plan should have.
Part I: Elements of an Effective Business Plan
Since a business plan is essential for the success of any new organization, it is only logical to draft one carefully. Now the purpose of this document is to serve as a guideline for running a company efficiently. The size and scale of operations depends on the objectives set out. Another key reason for drafting a business plan is to raise funds for your business venture. With prospective data and analytical data documented, it is easier to raise funds from banks and other investors.
With that out of the way, here are the key components your business plan should have.
- Executive Summary – This is where you summarize the entire business plan, ideally capturing the imagination of your target audience and addressing their concerns.
- Mission Statement – A mission statement is used to identify priorities and define what the business aims to accomplish. This benefits the business in avoiding any confusion whatsoever, allowing you to focus on the main objective.
- Marketing Plan – The business plan also contains details about how you plan to market your products or services and in which market they will be aimed at. It also contains details of competitors operating in the same segment.
- Management Plan – The teams and their responsibilities are clearly stated here. This division of labor is introduced to make sure that there is an efficient production cycle within the organization. Details regarding previous projects and successes are also discussed in detail in this section.
- SWOT Analysis – A business plan is incomplete without SWOT analysis. The term is an abbreviation for Strengths, Weaknesses, Opportunities and Threats. By defining each aspect, the firm is able to allocate resources to products that are profitable to them in the long run using such a tool. Such a tool can determine various demographics that could influence its success. This will help convince investors to provide funding for the venture.
- Cash Flow Statement – This statement provides a picture of what the initial finances will look like and how money will come and go through the business. The idea is to communicate the cash needs before, during and after starting the business.
In addition to these, your business plan will need to abide by a few practices, but that is in the next article of the series.