As mentioned in “5 Reasons Why You’ll Want A Business Plan”, it’s a good idea to write a business plan. I think it’s important to have SOMETHING prepared for you to reflect on or share when necessary. Coming from someone who has had little experience in the business world before we took this on, I understand that it may feel like a daunting task with no direction. The good news is that it can be a lot easier than you think.
There is no true cookie-cutter template that absolutely needs to be followed when writing your business plan. It can be as simple as writing down what product/service you’re providing along with your pricing. However, it can also become a complex textbook outlining various phases and developments you see your business evolving through. Everyone’s style will result in a different piece of work and everyone’s business is different so don’t compare yourselves to others.
Although there is no template per say, there is some core content that you should include. Take this as an opportunity to be creative and put your own special sauce into it. Especially if you are taking your proposed business to lenders, the following content will be important to include.
This is a quick overview of your whole plan. Who you are, what your business is, what direction the business is going, and how you’re going to get there. Use the executive summary as a hook for readers to get excited about your idea and continue reading. Make sure to include the big picture and exciting details that build anticipation. Think about doing this section last, once you have the meat and potatoes worked out. Remember, this will be someone’s first impression of your business, make it count. Since this is a summary, it’s best to save it for last.
This section can be as sparse or expansive as you’d like. There’s really no right or wrong here. You can just include the names and titles of the team, or add a full biography of the whole staff. Just make sure that the information you share has clear intent. Give the reader all of the information they need in the shortest amount of time.
Competitive Landscape/ Business Environment
In here, outline what your industry is all about. Taking the time to put in the research early will limit the possibility of surprise and “back to the drawing board” situations down the road. The bulk of this section should include:
- Who are the major competitors?
- What are the current trends?
- What do you see the industry evolving into?
- Where do you fit in? and most importantly…
- Where do you stand-out?
A SWOT Analysis (Strengths, Weaknesses, Opportunities, and Threats) is an easy to read, simple way to illustrate all of these points. Check out the link to see how you can translate the above question into a SWOT Analysis.
Back to the Honest Truth…
Now, I know I always come back to this point, but you need to be honest with yourself and the reader. Underplaying the industry because you think it will help you get your financing more easily is a dangerous game and quite honestly is unlikely to work out well in the end.
You’ve gone over what makes your business so great, now it’s time to show how you’re going to let your target market know that you exist. Here you’ll outline what you plan to do to gain your position in your community. Marketing is an important aspect of your business and in many cases can result in the success or “failure” (also known as feedback) of your business. You could be the best at what you do, but it’s not possible to do anything with that skill if they don’t know where to find you.
Marketing courses will have you prepare/present the “Marketing Mix 4 P’s”: Product, Price, Place, Promotion. This is the simplest way to get started on how you’re going to deliver your product/service to the market.
Unfortunately, there are A LOT of ways to market your business, and it can get quite expensive. While there is no right or wrong, it’s impossible to know what works for you if you don’t have any means of measuring your initiatives. We will get to marketing strategies another time but for now I want to leave you with two thoughts:
1. Be mindful of how much you’re spending.
There are many channels for you to execute on, and the costs can add up very quickly. Especially in your early stages when cash flow is sensitive, make sure you make calculated decisions on where you’re spending your money on marketing.
2. Always have an outcome measure for your initiatives.
What’s worse than throwing your money into a bottomless pit of marketing channels? The answer is: throwing your money into a bottomless pit of marketing channels and not know what the return-on-investment (ROI) is. Before making a purchase on any expense, ask yourself, “what is the ROI on this purchase”. Also, keep in mind that ROI isn’t always calculated in a dollar figure (ie. relationships, knowledge). Value is not just money.
Depending on what stage your business is in, this section will vary. Here are a few financial statements that are universal to all industries and will be important to include in your business plan:
- Balance Sheet
- outlining assets and liabilities
- Cash-flow statement
- revenue-generating sources and fixed/variable expenses
- Income Statement/ Profit and Loss Statement
- outline of the business’s performance over a period of time (often 1 year)
- Breakeven analysis
- at what unit (ie. patient visits) does your revenue start exceed your expenses (profitability)
If your business has already been operating for some time, you are probably familiar with these. If you’re starting out new, it may take some research on your own to understand how each of these function and how to compile them.
*If you’re starting a brand new business, your financial statements will be projections of what you’re expecting to occur throughout the year.
Risks and Conclusions
Once again, it’s time to get honest with yourself. There is no “zero risk” business. Make sure you dig deep to uncover as many vulnerabilities as you can. Be sure to take this exercise as an opportunity to problem-solve and demonstrate to yourself and readers the steps you will take to mitigate said risks!
Finally, when concluding your plan, give a quick recap of the highlights and don’t forget the leave the reader with some of that special sauce you cooked up in the introduction.
A business plan should include the following:
- Introduction/Executive Summary
- Competitive Landscape/ Business Environment
- Marketing Plan
- Risks and Conclusions
Writing a business plan can be stressful, time-consuming, and sometimes may even feel irrelevant, but it is an important step and will certainly result in a significant, potentially intangible, ROI. The process of brainstorming and writing out your ideas holds value.
If you feel stuck or unsure where you’re going with your plan – reach out to friends, colleagues, and those that have been there before. The odds that they were in the same boat as you are likely, and they should be more than happy to lend a helping hand.
Here’s to planning out a successful business!