5 Keys for Creating a Business Plan that Gets the Job Done - 5 Keys for Creating a Business Plan that Gets the Job Done
5 Keys for Creating a Business Plan that Gets the Job Done
In the excitement of launching your new business, it may be tempting to jump in without a solid plan. But taking a seat-of-your-pants approach can add to the risk. Creating your business strategy is an exploratory process in which you evaluate your options, test your assumptions, and often discover new opportunities. It might even lead you to refine aspects of your initial vision before investing too much money or time.
To write an effective business plan that guides your success, consider these 5 recommendations from industry experts:
1 Keep it simple
Novice entrepreneurs may assume that a business plan should be a lengthy tome, chock full of numbers. The Small Business Administration recommends beginning with a simple one- to two-page outline of your business concept,).1 Consider starting with a vision statement, then describe the problem your business will solve. Next, describe the potential market for your product or service, competitors and sales goals.
2 Be a customer
Think like your customer to help define the problem that you’ll solve. To do so, consider interviewing potential customers. This should help you hone your product or service and make sure your ideas are viable in the marketplace, according to the SBA’s recommendations.1
3 Be cautious
Ask yourself the right questions. How will competitors react to your pricing strategy? How many people will buy your product? How much will the cost of equipment or raw materials vary year-to-year? While you can’t possibly predict everything that will happen in the future, you can reduce uncertainty by building your business plan around conservative calculations, according to SCORE mentors.2 Use the most current data, demographics and purchasing patterns to refine your estimates and to calculate your startup expenses, payroll costs, sales forecast, cash flow, etc.
Once your business has launched, you may gain a clearer understanding of how to move from startup to second-stage growth when it’s tied to your business plan. Later, you may want to draft a more detailed plan that answers questions potential investors and future employees may ask. The editors at AllBusiness recommend fleshing out your target market, sales and marketing strategy, and integrate the evolving structure of your enterprise.3
A business plan should be a living document and regularly updated as your business strategy changes. But like other living beings, it thrives best when interacting with the outside world. Share it with others and get their feedback. Make a point to review and revise your plan to reflect the evolution of your vision. Writing a business plan is an opportunity to carefully think through every step of starting your new business so you can prepare for success.
Remember that a well-written plan help investors or lenders evaluate financing for your business.
The best business plans can be easily converted into an exciting pitch to investors or other interested stakeholders. The best stories improve with each reading. Make yours a classic.