If you’re here you’re probably wondering what the heck a business plan really entails and what’s the point of creating one? I mean you have a business to run, why waste time planning right? . . .WRONG! I’m currently side-eyeing you. You know better! We all know how the saying goes, “if you fail to plan, you plan to fail.”
When it comes to developing a business plan the best policy is to keep it simple by focusing on the essentials. A business plan sets out a business’s future objectives and strategies for achieving them.
As a business owner there are many reasons why you might need a business plan such as making improvements in your existing business, applying for a business loan, and searching for investors just to name a few.
Creating a business plan doesn’t have to be complicated. However, getting started may be overwhelming. So, here are 8 steps to create a successful business plan:
To come up with a successful business plan you not only need to know your company, product, and market intimately but that of your competitors as well. A good way to conduct research is to identify three businesses you admire in the industry you plan to enter. Once you identify the three businesses here are a few questions to consider:
⦁ What do each of these businesses have in common?
⦁ What type of background do the founders and owners have? Education? Work History?
⦁ How long has their business been operating?
⦁ What type of brand awareness do they have?
⦁ Who are their ideal clients?
⦁ Who do they Market to? And how?
⦁ What are the price points for their services or products?
⦁ Have they scaled their services or products since launching?
Determine what you can do to excel in the way that these businesses have while simultaneously setting yourself apart. Think about how you can capitalize on your unique strength and talents to stand out in the industry. It’s your responsibility as a business owner to know everything you can about your business and the industry you are moving into.
⦁ Define Your Mission.
Clearly defining the mission for your business will provide the foundation for your business plan.
For example, Starbucks’ mission statement is: “To inspire and nurture the human spirit — one person, one cup and one neighborhood at a time.”
When you prepare to develop your mission statement, consider what sets you apart from competitors? Why are you different? What problem do you hope to solve? Your mission statement should answer not only what you do, but how you do it, who you do it for, and what value your company brings.
After you have a mission statement draft, analyze whether any competitors could use the exact same statement. Determine whether your mission statement distinguishes your business from others. If you took your mission statement and the mission statement of a competitors and gave them both to an audience would they be able to determine which mission statement was yours?
⦁ Define Your Vision.
While your mission statement will broadly define your business, your vision statement narrows it down. When you prepare to develop your vision statement, consider what you want to achieve with your business? What goals will you set? How will you establish clear direction, purpose, and benchmarks for success in your business? Your vision statement should have a measurable goal for the future of your business as well.
Starbucks’ vision statement is “To establish Starbucks as the premier purveyor of the finest coffee in the world while maintaining our uncompromising principles while we grow.”
After drafting your mission and vision statements, the remaining steps will guide you in developing a plan to solidify how you can accomplish what you have set out to as your mission, and how to make your vision a reality.
⦁ Niche Down and Develop Your Customer Profile.
I’m going to go out on a limb here and say your business won’t survive if you don’t have clients or customers. So, it’s extremely important to understand who your customers are. Let me be the one to tell you, no matter what service or product you are selling its not for everybody, and quite frankly, you don’t want your business to appeal to everyone.
There’s a reason successful business owners emphasize that there are “riches in niches.” A niche refers to products, services, or interests that appeal to a small, specialized section of the population.
Take some time to really determine what niche your business will serve in the chosen industry. For example, my niche at Elysian Law is business and contract law, and my ideal clients are creatives and entrepreneurs that desire to scale and monetize their businesses by protecting their business and brand.
Once you have your niche identified determine who your ideal customer is and where you can find them, both online and in-person. This will help you truly understand how to attract these customers and know what their pain points are. This will also give you a head start on marketing and strategy for your business.
⦁ Plan Your Expenses.
Since money doesn’t grow on trees (last I checked), it’s important that you understand how much you will need in start-up costs as well as to sustain your business overtime. Consider these questions: do you have an investor? do you have money saved up? Will you be developing a pay as you go financial approach? How can you keep your expenses low? Are there processes you can keep virtual; can you work from home initially? Can you trade your services for other services?
When planning your expenses, you’ll also want to prepare a company profile that will include what products and services you offer. This will allow you to account for any product or service fees that need to be paid upfront. Investors want to make sure your business is equipped to make a return on their investment. Be sure to include everything from expenses, to cash flow and industry projections as well.
Without the financial support required to operate your business, your business won’t exist. Always be prepared. If you haven’t learned anything thus far from this post, take heed to this suggestion: borrow money before you need it. The last thing you want is to be caught up in a situation that has you scrambling applying for loans and seeking investors. You’re in a better position to accumulate income when your business is doing well.
⦁ Plan Your Operations.
Operations entail everything from day-to-day tasks to annual calendars.
How do you want your business to run? Will each service be a case-by-case basis or will you have standard operating procedures in place? Do you want to operate as a one-man or woman show? Or do you plan to hire employees? If you plan to hire employee’s do you plan to do so immediately? Would you like your business to be prepared to scale or do you plan to remain a small business? Will you have a brick and mortar location or will you operate virtually online?
You also want to make sure your business plan is adaptable, particularly in the operations category. Consider your audience for example, bankers will be more interested in expenses and cash flow. While employee’s and other team members might want to utilize the business plan to understand their purpose in the company.
⦁ Develop a Marketing Strategy.
A successful business plan will always include a strategic marketing plan. How will you market your business? How will you get customers? How will you make money? Consider the following marketing objectives:
⦁ Selling to various geographic locations
⦁ Boosting sales for specific products
⦁ Adding new inventory
⦁ Bundling products or services
⦁ Entering into long-term contracts with clients or customers
⦁ Enhancing product delivery and aesthetics etc.
If you’re going to slack off anywhere in your business plan (side-eyeing you again) this is not the place to do it! Each marketing objective should have several progressive goals and subsets of objectives and tactics to achieve these marketing goals. You’re also going to need to allocate expenses towards marketing in your expense section.
⦁ Be Flexible!
Be flexible, so that when something doesn’t go exactly as planned, you are prepared to reevaluate and keep moving forward. If that investor pulls out at the last minute, no problem! You borrowed money before you needed it and you’re covered. If there’s a sudden pandemic sweeping the nation and you have to abide by a stay-at-home or shelter in place order… no problem! You are able to operate completely virtually. I can’t stress being flexible enough!
The only thing certain in the world of business is uncertainty!
If you want additional tips and information on developing a successful business plan, download my Mind Your Business Guide: The Ultimate Business Planning Checklist for Entrepreneurs here.